Mbappé Apologizes After China Backlash

DAVID: IT IS 9:00 A.M. IN SHANGHAI, SHENZHEN, AND HERE IN HONG KONG. YOU ARE WATCHING "THE CHINA SHOW," AND WE ARE LIVE FROM THE ONE EARTH SUMMIT IN HONG KONG, WHERE POLICYMAKERS ARE GATHERED TO DISCUSS THE KEY ISSUES PERTAINING TO THE SUSTAINABLE DEVELOPMENT OF AI. I AM DAVID INGLES. YVONNE: AND I'M YVONNE MAN. OPENING THE MARKET THE MARKET TO GREATER CHINA. TOP STORIES, LEADING GAINS AFTER SK HYNIX A FULL JUMP IN PROFIT, AND THE PLAN TO RETURN $45 BILLION MORE TO SHAREHOLDERS. AND MAKING A HONG KONG DEBUT TODAY AFTER RAISING 1.3 BILLION DOLLARS, INVESTOR APPETITE FOR AI-RELATED LISTINGS. AND, MBAPPE APOLOGIZES FOR INSENSITIVE COMMENTS AFTER LOSING CHINESE SPONSORS AND BROADCASTERS. ALL RIGHT, WE ARE GOING TO BEGIN WITH BREAKING NEWS HERE TODAY WHEN IT COMES TO THE RBZ. THIS IS A BIT OF A SURPRISE BUT UNEXPECTEDLY, THEY ARE KEEPING RATES ON HOLD HERE THIS EVENING. THE MASSIVE MOVES ON THE KIWI, IT'S FALLING ON THE BACK OF THE SURPRISE. 90% OF THE ECONOMISTS WE WERE EXPECTING EXPECTED SOME SORT OF HIKE TODAY. IT KEEPING IT AT 2.75% HERE. THERE YOU GO, THE DIP IN THE KEYWAY. WE WILL BE INTERESTED TO SEE WHAT THE GOVERNORS WILL SAY IN THE NEXT HOUR, THAT PRESS BRIEFING IS UNDERWAY, TO TALK THEM THROUGH THE RATIONALE BEHIND HOLDING THINGS, AND AT A TIME WHEN WE ARE COUNTING DOWN TO THE FED DAY. WE ARE SEEING MOVEMENT COMING AT A TIME WHEN WE ALSO DID SEE HOTTER NUMBERS WHEN IT COMES TO AUSTRALIA'S INFLATION PICTURE HERE, WHICH IS MOVING THE NEEDLE HERE ON HIKES AND HOW IT'S BEING PRICED IN AUSTRALIA AS WELL. BUT YOU ARE SEEING THE Q. WEEK DROP, AND YIELDS ARE ACTUALLY HEADING LOWER THIS MORNING AS WELL HERE, DAVE. DAVID: YEAH. THE MARKETS ARE SUDDENLY HAVING TO DEAL WITH AN EXTRA COMPONENT, YOU KNOW, WHAT THEY ARE TRYING TO NAVIGATE HERE. PERHAPS THE REASON WHY THE RBNZ IS BECAUSE IT IS BEING HELD OF MORE RELEVANCE RIGHT NOW. WE TALK ABOUT THIS A LOT COME ABOUT THE RBNZ TENDS TO LEAD, NOT ALL THE TIME, BUT IT TENDS TO LEAVE THIS CYCLE, ESPECIALLY WHEN YOU LOOK AT DM'S, ONE OF THE FIRST IN THE TIGHTENING CYCLE MOST TIMES, THE FIRST TO EASE. IT COMPLICATES THE SITUATION RIGHT NOW, THE FACT THAT, TO YOUR POINT, IT ALMOST SEEMED LIKE A DONE DEAL THAT THEY WERE SUPPOSED TO HIKE INTEREST RATES. THE REACTION THAT YOU NOTED UNDERSCORES THAT, I IMAGINE, AND THIS IS ME SPECULATING, THIS MIGHT KICK OFF AN EXTRA, AND INCREMENTAL ADDING OF RISK ONTO THE TABLE RIGHT NOW, GIVEN THE BIG PICTURE PREVALENCE -- RELEVANCE OF THE RBNZ. WE WILL SEE, LATER ON, OF COURSE. YVONNE: YEAH. I'M GETTING MORE LINES CROSSING, TALKING ABOUT THE BREAKDOWN OF THE BOAT, FOUR MEMBERS, THREE VOTED FOR A 25 BASIS POINT HIKE. SO QUITE DIVIDED WITHIN THE COMMUNITY HERE WHAT TO DO. IT IS QUITE SPLIT. THEY ARE TALKING HIGHER FUEL PRICES BOOSTING INFLATION, BUT THEY ALSO TALKED ABOUT THE FACT THAT MONETARY POLICY FOCUSED ON THE MEDIUM-TERM INFLATION TARGET, THE IMPACT OF GLOBAL TARGETS DOMESTICALLY LESS THAN ASSUMED. SO MAYBE THEY ARE THINKING THE IMPACT YOU ARE SEEING FROM FUEL TO ALL PRICES MIGHT NOT HAVE AS MUCH OF AN IMPACT ON THE NEW ZEALAND ECONOMY IS EXPECTED HERE. SO MAYBE A LITTLE MORE DOVISH, AS YOU SEE, CONDITIONS ARE UNEVEN. DOMESTIC DEMAND SUBDUED OUTSIDE OF EXPORT CENTERS. SO IT LOOKS LIKE THE RISK TO THE GLOBAL OUTLOOK ARE BECOMING PERVASIVE, THEY SAY, BUT IMPACT ON SHORT-TERM PRICING BEHAVIOR OF HERE CONTAIN PEER SO THEY ARE FOCUSING A LITTLE BIT MORE INWARDLY HERE IT SEEMS ACCORDING TO THIS STATEMENT. THAT IS ONE THING TO WATCH AS WE COUNT THEM TO BE FED, RIGHT? LARGELY EXPECTED TO HOLD, THE FED CLOSING MEETING TODAY, AND CERTAINLY THERE WILL BE A LOT ON TAP HERE AND ONE KEVIN WARSH IS GOING TO SAY. OBVIOUSLY THEY'VE BEEN TALKING ABOUT THE NEED TO PAUSE -- OR AT LEAST MARKETS ARE TALKING ABOUT THE NEED TO PAUSE, GIVEN WE ARE COUNTING DOWN TO THE MIDTERMS HERE. MANY SEE THEM UNLIKELY TO DO ANYTHING. MARKETS ARE DOING THIS, THOUGH, RIGHT? THE DOVISH COMMENTS CERTAINLY IS LEADING TO A LOT OF CONFUSION, BUT THE REST OF THE MARKETS ARE ACTUALLY QUITE POSITIVE, RIGHT? IF YOU LOOK AT WHAT THE TECH SITE IS DOING, RIGHT? THIS OPTIMISM WE ARE SEEING ON A HIGH IGNITED THANKS TO WHAT WE HEARD FROM ANTHROPIC YESTERDAY, AND NOW SK HYNIX AS WELL. THOSE EARNINGS ARE HELPING THE REST OF THE DAY, RIGHT? THE KOSPI UP CLOSE TO 5%. WE ARE ALSO FOCUSING A LITTLE BIT MORE ON THE CHIPMAKERS. SK HYNIX UP FROM 6%, TALKING ABOUT SEVENFOLD INCREASE IN PROFITS HERE, ALSO THAT SHAREHOLDER RETURN PLAN THAT IS LIFTING THAT STOCK IN PARTICULAR, HELPING SOME OF THE CHIPMAKERS IN THE REGION, TSMC AND OTHERS ARE ALL HIGHER. OIL MARKING WHAT IS GOING ON IN THE ISRAELI ELECTION THERE, BACK TO $115 LEVEL FOR BRENT. THE AUSSIE AND GAINER ON THAT INFLATION DATA, THE KEYWAY, AND WE ARE WATCHING US DRUG YIELDS, ALSO HIGHER TODAY -- WATCHING THE AUSSIE YIELDS, ALSO HIGHER TODAY. THE LAST THERE WERE TRADING YESTERDAY WAS QUITE TELLING. IT SEEMED LIKE INVESTORS WERE DISAPPOINTED WHEN IT COMES TO THE NATIONAL BUY, AND MAYBE THEY ARE NOT BUYING AS AGGRESSIVELY AS THEY THOUGHT. WE WILL WATCH THAT. WE WILL WATCH HOW THE AI HARDWARE SPACE BEARS TODAY. FUTURES ARE POINTING POSITIVE TODAY. DAVID, I HAVE NOT EVEN TALKED ABOUT WHERE YOU ARE GET A LOT GOING ON ON YOUR END. DAVID: YEAH. WELL, THAT SHOULD BE MY CUE TO DISCUSS THE RELEVANCE OF THIS EVENT, WHICH I PROMISE I WILL GET TO IN 15 SECONDS. I NEED TO MENTION, BECAUSE YOU MENTIONED THE OIL STORY, THE JOURNAL REPORT THAT HIS OUTCOME AND I BRING THIS UP BECAUSE OF THE RBNZ TALKING ABOUT MAYBE INFLATION, THE ENERGY COMPONENT OF THE INFLATION STORY MAY NOT BE AS RELEVANT RIGHT NOW, BUT IT IS SOMETHING TO CONSIDER, BECAUSE BEYOND THE MIDTERMS, SHOULD WE EXPECT A RE-ESCALATION IN THE MIDDLE EAST? AND I THINK THE JOURNAL REPORT DISCUSSES THIS POSSIBLE WARNING AROUND THE U.S. AND IRAN. JUST PUT THAT ON THE TABLE AROUND THESE DISCUSSIONS. BUT ON THE ENERGY COMPONENT, THE REASON I'M HERE AT THE SUMMIT, RIGHT? WE DISCUSSED THE LONGER TERM SUSTAINABLE LIVING ISSUES -- SUSTAINABILITY ISSUES. THE GUEST I HAD, FORMERLY OF BAIDU, SAYS WE UNDERESTIMATE BOTH IN THE SHORT AND LONG-TERM THE POTENTIAL OF THIS TECHNOLOGY. AND THE REASON THAT IS RELEVANT, YOU GUYS TALKED ABOUT SK HYNIX, THEY ARE BOOKED OUT FOR THE NEXT FOUR YEARS. WE HAVE ENOUGH ENERGY, RESOURCES? NUMBER ONE, TWO SEPARATE CONVERSATIONS WE NEED TO BE HAVING PARALLEL TO THE AI BUILDOUT, INTERSECTING WITH THE AI STORY. I UNDERSTAND THAT JOHNNY MIGHT BE SPEAKING IN THE NEXT ROOM, ADDRESSING THE SUMMIT HERE, AND WE HAVE A LOT TO GET TO AS WELL. KEVIN CHOI, THE PERMANENT SECRETARY RENOVATION HERE IN HONG KONG, WILL DISCUSS HONG KONG'S ROLE IN THAT BUILD OUTCOME OF THE CHINESE MINISTER WILL ALSO BE SPEAKING AT ABOUT 20 MINUTES OR SO. THAT CONVERSATION, OF COURSE, AND POE MENLO -- POMAN LO WILL BE JOINING US AT THE TIMES ON YOUR SCREENS. YVONNE: YEAH. LOOKING FORWARD TO IT, DAVE. WE WILL COME BACK TO YOU SOON. TECHNICALLY OUTPERFORMER THROUGHOUT THE REGION AFTER SK HYNIX A EARNINGS. MARKETS REPORTER ANTHONY STEPHENS IS HERE TO GET IN THE WEEDS OF THE HIGH NEXT RESULTS. ANTHONY: IT'S ACROSS THE BOARD POSITIVE, FOR THE MARKET AS A WHOLE, RIGHT? SAMSUNG IS OF MORE THAN SK HYNIX, WHICH IS A GREAT SIGN. THERE WAS SOME EARLY BUBBLES ON THE HIGH NEXT RESULTS IN THE NEXT SESSION, BECAUSE THE MISS ON THE NEXT SIDE, BECAUSE OF FX, AND VALUE, WITHHOLDING, AND OTHER MEMORY COMPANIES, WHICH HAVE COLLAPSED OVER THE COUPLE OF WEEKS, RIGHT? SO WE HAVE THE BUYING ON THE MEMORY SPACE, CONTINGENT, WE DID SEE A NET BUY YESTERDAY, EARLY THIS MORNING, YOU CAN SEE THAT ON THE TERMINAL COMING THROUGH, IF TERRELL OUTPERFORMER HERE -- MATERIAL OUTPERFORMER HERE, RIGHT? WE ALSO SAW A BUNCH OF HEADLINES IN THE U.S., DIVERSIFICATION AWAY FROM NVIDIA. 'S ORACLE, OPENAI, THEY ARE LOOKING TO BUY GOOGLE, CEREBRAS CPU'S AS WELCOME AND THAT BROADENS OUT THE AI. WE SEE SOME OF THAT IN THE KOREAN MARKET AS WELL. SAMSUNG IS VERY STRONG. SO THE TRADE IS BROADENING OUT AT THE SAME TIME AS IT GETS THIS INCREDIBLE UPDATE ON MULTIYEAR DEMAND, MULTIYEAR LOCKED IN DEMAND FROM ONE OF THE BIGGEST PLAYERS. YVONNE: ANTHONY, THANK YOU, OUR MARKETS REPORTER ANTHONY STEPHENS OF WHAT THIS MEANS FOR THE BROADER AI STORY. LET'S BRING IN STEPHANIE LEUNG, CHIEF INVESTMENT OFFICER AT STASHAWAY. IT'S GREAT TO HAVE YOU. YOU ARE WRITING ABOUT THIS VERY TOPIC. WHEN YOU TAKE A WAKE SK HYNIX AND THESE BLOWOUT NUMBERS, SEVENFOLD INCREASE IN PROFITS, WHAT DOES THAT TELL YOU ABOUT WHERE WE ARE IN THIS WHOLE AI TRADE RIGHT NOW? AND HOW DOES ANYONE DETERMINE WHAT THEY WILL BE? STEPHANIE: THAT'S THE QUESTION INVESTORS HAVE BEEN ASKING US FOR THE LAST 2.5 YEARS, TO BE HONEST. RIGHT NOW, WE ARE AT A VERY IMPORTANT JUNCTURE. THE REASON WHY IS SO IMPORTANT, NUMBER ONE, IS A VERY HUGE IPO, RIGHT? BUT MORE IMPORTANTLY, EVENTS IN THE LAST FEW WEEKS HAVE SHOWN US THAT INCREASINGLY THESE NEED TO BE FUNDED BY EQUITY INVESTORS. SO THEY ARE SAYING WE ARE NOT GOING TO PLAY THIS GAME BECAUSE THE INTEREST RATES ARE HIGHER. SECONDLY, IT IS QUITE BINARY. ON THE UPSIDE, YOU CAN GET TRILLIONS IN TERMS OF ECONOMIC VALUE, THAT'S WHAT ANTHROPIC IS POINTING TO. BUT ON THE OTHER HAND IS THE EXECUTION OF THESE DATA CENTER BUILD OUTS. THERE'S A LOT OF DOWNSIDE FOR DEBT INVESTORS. SO SOVEREIGN DEBT VERSUS EQUITY PERSPECTIVE. THE UPSIDE FOR EQUITY IS SO MUCH HIGHER, AND THEREFORE WHEN YOU ARE AN INVESTOR, YOU START ASKING ABOUT, OK, WHY AM I FINDING THIS? AND THEREFORE, THE IPO IS SO IMPORTANT, BECAUSE IT SHOWS, OK, EQUITY INVESTORS ARE WILLING TO STEP IN WITH CAPITAL TO CONTINUE TO FIND THE AI BUILDOUT. YVONNE: YOU ARE STARTING TO SEE THE FUNDING GAP WIDENED IN, RIGHT? WHETHER IT'S THE AMOUNT OF CAPEX VERSUS CASH FLOWS THEY HAVE. HOW DO YOU FIND WINNERS AND LOSERS NOW? STEPHANIE: IT'S ACTUALLY POLICY. ONE THING THAT STOOD OUT TO ME IN THE ANTHROPIC FILING IS ANTHROPIC ACTUALLY HAS A LOT OF CASH. SO IF YOU LOOK AT THEIR CASH ON HAND, THEY ARE CURRENTLY ABOUT $100 BILLION. THEY RAISED $140 BILLION, SO THEY HAVE A LOT OF CASH. IF YOU PUT THAT IN PERSPECTIVE, THEY ACTUALLY HAVE MORE CASH THAN THE MAG 7. BUT I THINK IN TOTAL, ALL OF THESE HYPERSCALERS, THE MAG SEVEN WITH A LOT OF CASH, WITH QUALITY EARNINGS, I THINK THAT IS SAFER, AND THE MORE VISIBLE PLAYERS IN THE NEXT PHASE OF THE AI BUILDOUT. I THINK THAT'S WHERE THE MONEY WILL GO. YVONNE: DOES IT LEAN MORE TOWARD THE EQUITY SIDE OF THINGS? OR ARE YOU LOOKING AT THE BOND MARKET NOW? MAYBE THERE ARE SOME OPPORTUNITIES THERE. STEPHANIE: TO ME, THE UNCERTAINTY OF THE BOND MARKET IS STILL WHERE THE RISK IS COME UP WHERE THE 10 YEAR GOES IN THE U.S. EQUITY MARKET. AND I THINK WHAT THE FED CONTINUING TO RAISE INTEREST RATES, WITH OIL PRICES STILL AT $100 OR EVEN ABOVE -- I MEAN, WTI THIS MORNING, COULD BE POTENTIAL DISRUPTION GOING FORWARD. THERE'S A LOT IN THE BOND MARKET, NOT TO MENTION THE U.S. FISCAL SITUATION IS GOING TO DETERIORATE. SO AGAIN, THE MIDTERM IS A CHALLENGE FOR US. AND I THINK IF I WERE TO THINK ABOUT IT FROM AN ALLOCATION PERSPECTIVE, YOU GOT A LOT MORE UPSIDE IN THE AI SPACE AS AN EQUITY HOLDER THAN A BOND HOLDER, WAY OF CAPITAL ALLOCATIONS. DAVID: STEPHANIE, DAVID HERE. GIVEN THE CERTAINTY THAT, WELL, FOR ONE, THE UNCERTAINTY OF A RISK-FREE RATE COME AND THE CERTAINTY, LOOKING AT THE SK HYNIX REPORT AGAIN, YOU KNOW, THEY BOTH GO ALL THE WAY TO 2029, RIGHT? IT'S ALMOST LIKE DISNEY LAND SAYS SPACE MOUNTAIN IS BOOKED UP, DON'T EVEN TRY AND COME, IT IS PACKED TO CAPACITY. WHAT DO I DO WITHOUT MUCH CERTAINTY? IS THIS AN OBVIOUS BUY? WHAT ARE THE RISKS? STEPHANIE: YEAH. I THINK, AGAIN, GO BACK TO ANTHROPIC, BECAUSE THEY ARE FINDING A LOT OF THE BUILD OUTS, IF YOU LOOK AT ANTHROPIC SELLING, THEY HAVE ABOUT $800 BILLION IN TERMS OF CAPEX, $400 BILLION OF THAT IS LOCKED IN. THAT IS PART OF THE UNCERTAINTY FOR SK HYNIX FOR THE HARDWARE BUILDERS. OF COURSE, THE REST DEPENDS ON WHETHER OR NOT ANTHROPIC CAN GENERATE REVENUE AT A FAST ENOUGH PACE TO PAY FOR THE CAPEX. IF YOU LOOK AT ANTHROPIC'S CURRENT RUN RATE, THERE WAS A BIT OF A DIP IN THE LAST TWO MONTHS. BUT SINCE THEY'VE LOWERED PRICES FOR TOKENS, THE USAGE OF THESE TOKENS HAS SKYROCKETED. SO THERE IS ELASTICITY IN TERMS OF PRICING AND VOLUME. AND I THINK GIVEN THAT THERE'S A LOT OF DEMAND, FROM A KNOWLEDGE WORKER PERSPECTIVE, THE USAGE WILL CONTINUE TO GROW, AND THE QUESTION IS, OF COURSE, HOW FAST THEY WILL BE ABLE TO GROW IN ORDER TO FIND ALL OF THE CAPEX THAT ARE COMMITTED. YVONNE: CHINA IS NOT DISSIPATING IN ANY OF THE NEWS THAT WE HIGHLIGHTED WITH ANTHROPIC AND MARKETS THAT CONTINUE TO BE SO WEAK. IS THERE ANY SORT OF TACTICAL TRADE YOU CAN SEE? STEPHANIE: I THINK THE SITUATION NEEDS TO IMPROVE, AND, OF COURSE, AND A POSITIVE SIGN FROM THE GOVERNMENT, DOING SOME STIMULUS. IT'S GOOD DIRECTION, BUT THE MAGNITUDE OF THAT, I DON'T THINK IT'S ENOUGH TO LIFT ALL BOATS. QUITE SELECTIVE IN CHINA. ONE AREA IS DIVIDENDS. THAT'S WHERE YOU CAN FIND SOME SAFETY. YVONNE: STEPHANIE, THANK YOU, STEPHANIE LEUNG, CHIEF INVESTMENT OFFICER AT STASHAWAY. WE WILL CONTINUE TO TRACK WHAT IS GOING ON WITH THE RBNZ, CERTAINLY A SURPRISING MOVE HERE, TO KEEP RATES UNCHANGED. YOU'RE ALREADY SEE A CONTINUED SLIDE WHEN IT COMES TO THE KIWI. THE TWO YEAR YIELD, DOWN FROM 11 BASIS POINTS HERE. THEY ALSO TALKED ABOUT THE FACT THAT EVEN THE GOVERNOR IS ONE OF THE ONES WHO DECIDED, AND HER VOTE PULLED AND KEEP RATES UNCHANGED. THAT IS THE LATEST WHEN IT COMES TO THAT AS WELL COULD WE WILL UNPACK MORE ABOUT THAT, AND WHAT THAT MEANS FOR CENTRAL BANKS THIS WEEK. COMING UP, WE ARE COUNTING DOWN THE OPENING TRADE. THIS IS "THE CHINA SHOW." YVONNE: TAKING YOU LIVE TO PICTURES OUT OF JERUSALEM RIGHT NOW, WHERE YOU ARE SEEING PRIME MINISTER BENJAMIN NETANYAHU SPEAKING TO A CROWD. THIS IS, OF COURSE, AS WE COUNT DOWN TO THIS ELECTION, AND REALLY THE VOTES ARE DEADLOCKED WITH NETANYAHU WITH THE OPPOSITION LEADER AS WELL. SO IT SEEMS LIKE THIS ELECTION IS REALLY GOING TO LAST HOURS HERE. IN HIS NECK AND NECK, AND BOTH ON TRACK TO SECURE 51 PARLIAMENTARY SEATS AS WELL. CERTAINLY THAT IS ONE THING TO WATCH VERY CLOSELY. UPDATED EXIT POLLS SHOWING A TIE. LET'S BRING IN MADISON, WHO HAS BEEN TRACKING EVERYTHING. GIVE US AN UPDATE. >> AS YOU SAY, THIS IS A REPEAT OF THE PATTERN WE SEE QUITE OFTEN WITH ELECTIONS IN ISRAEL, THAT IS AN INCONCLUSIVE RESULT. THE EXIT POLLS SHOWING THESE TWO CANDIDATES PRETTY MUCH DEADLOCKED AND UNABLE TO GET ENOUGH TO FORM A MAJORITY IN THEIR OWN RIGHT. THE QUESTION THEN BEGAN, CANDIDATE FORM A COALITION WITH OTHER PARTIES? THAT COULD TAKE DAYS IF NOT WEEKS. WHAT WE SEEM BEFORE AGAIN IN ISRAEL, A COALITION GOVERNMENT, BACK AGAIN INTO AN ELECTION. WHAT WE DO KNOW IS THAT THERE ARE TWO ISRAELI-ARAB PARTIES, AND THESE PARTIES SEEM TO HAVE PERFORMED BETTER THAN EXPECTED, AND THEY ARE UNLIKELY, OF COURSE, TO ALLY WITH NETANYAHU. WILL THEY BE ABLE TO FORM A COALITION GOVERNMENT INSTEAD WITH GADI EISENKOT? WE ARE IN A PERIOD OF UNCERTAINTY IN ISRAELI POLITICS YET AGAIN FOR IT IS ONE OF THEM GOING TO FORM A GOVERNMENT? WHAT IS CLEAR IS TURNOUT IS SO HIGH THINK THIS IS NOT REALLY A STRONG RESULT FOR BENJAMIN NETANYAHU, IN THE WAY THAT VOTERS HAVE REPEATEDLY VOTED, THERE STILL A LOT OF ANGER AT ISRAEL AT THE INTELLIGENCE FAILURES, THAT THEY FAILED TO PRESENT THE HAMAS ATTACK ON ISRAEL IN 2023, AND DID NETANYAHU REALLY ACCEPT RESPONSIBILITY FOR THOSE FAILURES, TO PREVENT THAT ATTACK? SO, QUESTIONS ABOUT THAT, YOU KNOW, UPSET ABOUT THE STATUS OF THE ISRAELI ECONOMY AS WELL AS QUESTIONS ABOUT THE JUDICIAL SYSTEM IN ISRAEL. SO IT IS NOT REALLY A STRONG SEWING OF SUPPORT FOR HIM, BUT WE ARE, AGAIN, IN A PERIOD A PROTRACTED UNCERTAINTY IN ISRAEL, DAYS IF NOT WEEKS OF NEGOTIATIONS. YVONNE: IT SEEMS LIKE THE TOP ELECTION ISSUE HERE, ROS, HOW TO THE TWO DIFFER FROM POLICIES ON THAT FRONT? ROSALIND: WELL, ACTUALLY NOT THAT FAR APART. NETANYAHU PERHAPS TAKING A STRONGER LINE ON SENTENCING. AND THERE ARE, OF COURSE, THESE REPORTS AND THESE INDICATIONS THAT THE U.S. AND ISRAEL MIGHT BE GEARING UP FOR ANOTHER ROUND OF MILITARY ACTION AGAINST IRAN, AFTER THESE ELECTIONS AND AFTER THE U.S. MIDTERMS. AND THAT IS SOMETHING THAT EVERYBODY GLOBALLY IS WATCHING CLOSELY, TO SEE IF THOSE MILITARY ACTIONS REALLY DO RESUME. BUT GADI IS A BIT MORE MODERATE, HE DOES SAY IRAN POSING NUCLEAR PROGRAM DOES NEED TO BE REINED IN, BUT HE ALSO SAYS CHANGE IN IRAN IS NOT REALLY A FEASIBLE OPTION. AND HE'S CRITICAL OF THE GOVERNMENT, SAYING THEY HAVE NOT DONE ENOUGH AGAINST ISRAELIS WHO HAVE BEEN ATTACKING PALESTINIANS. SO THERE ARE SPACE BETWEEN THEM, AND HE SAYS HE WOULD BRING, YOU KNOW, AGAIN, A GREAT FOCUS TO SECURITY IN ISRAEL. SO TONIGHT WAS MORE ABOUT WHETHER THEY WANTED TO SEND A MESSAGE IN A WAY TO NETANYAHU OVER THE ATTACKS OF 2023 HAMAS ATTACK ON GAZA -- ON ISRAEL, AND THAT IS WHAT IT SEEMS TO HAVE BEEN. YVONNE: ROS, THANK YOU, ROSALIND MATHIESON COME OUR CHIEF ASIAN CORRESPONDENT ON THE LATEST WHEN IT COMES ISRAEL. IN THE PREMARKET, WE ARE SEEING THE SET UP LOOKING PRETTY POSITIVE WHEN IT COMES TO THE HANG SENG COME UP ABOUT .2%. FUTURES PUSHING 2% IN CHINA AS WELL. WE WILL LEAVE YOU WITH SOME NEW ZEALAND ASSETS, AS WE WATCH VERY CLOSELY HERE. IT SEEMS THE KIWI FALLING AGAINST MOST. WE WILL GIVE YOU AN UPDATE ON THAT NEXT. THIS IS BLOOMBERG. ♪ YVONNE: TALKING KIWI ACIDS HERE TODAY. A SLIDE WHEN IT COMES TO THE KIWI. THE AUSSIE. WITH THE HAWKISH COMMENTARY ON THE BACK OF THE INFLATION. A BIT OF A PAIN TRAIN. ANNA BREMAN COME OF THE RBNZ GOVERNOR, WILL BE SPEAKING LATER, THAT'S WHY YOU ARE SEEING THE KIWI SLIDE AGAINST MOST IF NOT ALL THE PEERS HERE THIS MORNING. WHEN IT COMES TO THE BOND MARKET, THE TWO YEAR BOND YIELD IS DROPPING SUBSTANTIALLY. HONG KONG, LOTS OF EARNINGS TO TELL YOU ABOUT WHEN COME TO SOME OF THE AI HARDWARE SIDE OF THINGS THAT REPORT ON THURSDAY. WE ARE SEEING A BID WHEN IT COMES TO ASIAN TECH. QUARTERLY SALES FALLING AS THAT LABUBU FAD FALLS. ♪ DAVID: GOOD MORNING AND WELCOME BACK. YOU ARE WATCHING "THE CHINA SHOW ." FUTURES ARE POINTING TO SOME SOLID GAINS AT THE OPEN HERE. WE ARE LOOKING AT SOME IDIOSYNCRATIC TECH STORIES. TECH FOR ONE, CONSUMER FACING, AND ON TOP OF THAT, THE SK HYNIX STORY IS PLAYING OUT SEPARATELY, BIGGER HARDWARE STORY COULD AND, OF COURSE, THE RBNZ, A TOPIC AMONG THE MANY OTHER THINGS ON DECK TODAY. YVONNE: YEAH. RIP OFF THE RUN DOWN. RIP IT OFF. WE WILL GO WITH IT, RIGHT? DAVID: WHO NEEDS THE RUNDOWN? YVONNE: YEAH. AND WE HAVE THE GOVERNOR COMING ON. GOVERNOR BREMAN WILL HAVE A LOT OF QUESTIONS ABOUT WHAT HAPPENED IN THE MEETING, THE DIVIDE OF THE COMMITTEE AS WELL, TO KEEP RATES UNCHANGED. IN THE MEANTIME, THERE HAVE BEEN SOME POSITIVE TIER ONES COMING THROUGH FROM THE LIKES OF SK HYNIX. THAT STOCK CONTINUES TO GO HIGHER, UP ABOUT 8% IN KOREA RIGHT NOW. THAT STOCK SEVENFOLD IN PROFITS PEERS WHEN IT COMES TO THE DEMAND PICTURE, THAT HAS NOT REALLY CHANGED. CERTAINLY THAT IS LISTING -- LIFTING THE AI TRADE ACROSS THE REGION COULD ONCE AGAIN, WHAT WE SAW OVERNIGHT, THE INDEX ALSO HIGHER, YOU KNOW, SOME OF THE NEWS WE GOT FOR THE FUNDRAISING, RIGHT? META HAD THE SHARE SALE THAT WAS FIVE TIMES WHAT WAS DESCRIBED, SO CERTAINLY THERE IS ENOUGH TO KEEP THIS AI TRADE GOING HERE TODAY. THAT IS LIFTED CHINA AS WELL AS GAINS MORE THAN 1% RIGHT NOW. THAT'S WHAT WE SAW YESTERDAY, RIGHT? THE LAST HOUR OF TRADING WAS QUITE INTERESTING, RIGHT? THERE WAS A BIT OF A DROP AT THE END OF THE CLOSE, GIVEN THAT THE NATIONAL TEAM IS NOT BUYING AS AGGRESSIVELY AS THEY EXPECTED. BUT AGAIN TODAY, IT SEEMS WE ARE SEEING ENOUGH OF THOSE FLOWS TO ON FOUR MARKETS. WE DO HAVE MORGAN STANLEY COMING ON. LAURA WANG IS TALKING EQUITIES, AND SHE SAYS WE MAY NOT BE THERE JUST YET. WHEN IT COMES TO HONG KONG IN PARTICULAR COME AS WE TALK ABOUT THAT PREMIUM, IT'S QUITE WIDE RIGHT NOW, IN FAVOR OF THE SHARES. THAT GAP, WHICH WE HAVE NOT SEEN IN ABOUT 17 MONTHS, THAT'S ONE THING TO WATCH A PARTICULAR. HONG KONG ALSO LOOKING OK TODAY. UP ABOUT 1%. WE ARE STILL WELL BELOW THAT 4000 THRESHOLD THE HERE THIS MORNING. THE EXCEPTION WILL BE POPMART, RIGHT? A 50% DROP IN QUARTERLY SALES, YES, THERE WAS THE HEIGHT BASIS OF SALES THAT THEY ARE SAYING WHEN IT COMES TO SALES IS SLOWING DOWN. IN CHINA, A DECLINE OF 25%, 30%. SALES IN AMERICA ALSO FALLING 75%. THE LABUBU FAD IS COOLING AND IS WEIGHING ON THE STOCK THIS MORNING. DOWN CLOSE TO 4%. WE GOT SOME EARNINGS TO TELL YOU ABOUT, BIOTECH, PHARMA COMPANIES, THEY GO COME OF THAT NET INCOME BEAT LOOKING TO SOFT UP 11% YEAR TO DATE. WHAT'S HAPPENING WITH DONGHSAN'S POSITION, AND OIL COMPANY, AI TRADE, FIRST DAY OF SCHOOL, AND THE H-SHARES WERE DOWN BY 4%, DAVE. DAVID: YEAH. FOR MORE ON THIS DEBUT TODAY ON THE BROADER ACROSS MARKETS TODAY IN THE LAST FEW WEEKS, OF COURSE, AI HARDWARE SECTOR, LET'S BRING IN OUR TEAM. WE ARE JOINED BY OUR MANAGING EDITOR FOR ASIAN EQUITIES, AND SPECIFICALLY THE HARDWARE STORY, ZHONGSHAN -- SEAN CHEN. LIANTING, LET ME START WITH YOU, WHAT IS THE STAGE WITH THE COMPANY DEBUTING, THE BROADER MARKETS CONCERNS TODAY? LIANTING: YEAH. IF YOU LOOK AT IT, DOWN 4%, AND DONG SHEN -- DONGSHAN IS A MAJOR SUPPLY PLAYER. IT SITS RIGHT IN THE HEART OF THIS AI TRADE. AND THE FACT THAT IT IS NOT DOING WELL REALLY DOES NOT BODE WELL FOR MORE IPOS COMING TO HONG KONG. THE WHOLE LISTING JOURNEY FOR THIS COMPANY HAS BEEN QUITE ROCKY. IF YOU LOOK AT FUNDRAISING, AIMING FOR DOUBLE THE SIZE BUT IN THE END OF $1.3 BILLION. AND, YOU KNOW, IT IS TRADING AT SUCH A STEEP DISCOUNT COME OF RETAIL PORTION WAS ONLY HALF COVERED. GRAY MARKET WAS DOWN YESTERDAY. SO OVERALL, IT REALLY SHOWS THAT THE MARKET IS QUITE CAUTIOUS WHEN IT COMES TO THOSE NAMES, WHICH HAVE DONE REALLY WELL. AND IF YOU LOOK AT DONGSHAN'S LIFTED SHARES, IT HAS COME DOWN FROM ITS RECENT PEAK, BUT STILL UP 30% YEAR TO DATE. SO GOING FORWARD, LOOKING AT THE BIGGER HONG KONG IPO MARKET, I THINK THIS ONE IS GOING TO BE A LITTLE BIT OF SOME KIND OF BAD SIGN FOR MORE CHINA AI-RELATED COMPANIES TO HIT THE MARKET FOR THE REMAINDER OF THE YEAR. YVONNE: YEAH. SEAN, AS LIANTING MENTION SOME OF THESE WERE TRADED AT A DISCOUNT. NOW IT IS DOWN MORE THAN 40% IT IS THAT A SURPRISE TO YOU? SEAN: WELL, IT'S HARDLY A SURPRISE, BECAUSE AS DONGSHAN HAS LISTED, THE NEAR TERM DRIVER IS A RELATIVE VALUE. BECAUSE THIS STOCK HAS VALUED, THE REST HAS DECREASED A LOT. THE DISCOUNT HAS NARROWED TO ABOUT 30% AS IT DEBUTED. THIS COMPARED TO A 45% DISCOUNT IN THE TECHNOLOGY HARDWARE SECTOR. WE TRACKED, THERE ARE 31 COMPANIES IN THE SECTOR. THE NARROWER DISCOUNT HAVE NATURALLY LED TO A CHOP YOUR DEBUT TODAY. YVONNE: YOU MENTIONED A 40% DROP. WHAT DO YOU THINK OF THE DRIVER OF THAT? DO YOU SEE ANY CRACKS IN THE EARNINGS? SEAN: WELL, FIRSTLY, WE DON'T SEE ANY CRACKS IN THE EARNINGS, AND THE DROP IN THE PAST MONTH WAS MAINLY DRIVEN BY GEOPOLITICAL TENSIONS AND THE SENTIMENT RATHER THAN THE CAPEX CONCERNS THAT IS AFFECTING OTHER COMPANIES. BY DONGSHAN'S POSITION AND MORE BROADLY THE AI OPTICS COMPANIES IN CHINA COME OF GEOPOLITICS HAS BEEN A MAJOR HEADWIND IN THE PAST MONTH, BECAUSE THE REPORTED BAN ON CHINESE RECEIVERS, SO POTENTIAL POLICIES COULD HIT DONGSHAN HOTTER THAT HARDER THAN ITS COMPETITORS, BECAUSE IT MAKES OPTICAL JUST, WHICH IS UPSTREAM THE RECEIVERS. YVONNE: WE HAVE SOME OF THESE AI HARDWARE COMPANIES REPORTING IN CHINA. THESE STOCKS ARE GOING TO HIT HARD, AS SEAN MENTIONED, MAYBE NOT BECAUSE OF THE EARNINGS SIDE OF THINGS. WHAT DO WE NEED TO SEE TO BRING BUYERS BACK NOW? LIANTING: YEAH. THE BAR IS REALLY HIKE IT AS YOU MENTIONED, SOME OF THE BIGGEST AI WINNERS IN CHINA, INCLUDING VICTORIA GIANT, THEIR STOCKS HAVE DROPPED SO MUCH FROM RECENT PEAKS. AND IF YOU LOOK AT VALUATIONS OF STOXX 50, WHICH IS A BENCHMARK OF AI HARDWARE AND CHINA, THAT HAS DROPPED TO ABOUT 40 TIMES, BUT IT IS TOO EXPENSIVE COMPARED TO NASDAQ, WHICH IS ABOUT 20 TIMES. SO INVESTORS ARE, YOU KNOW, ASKING FOR NOT JUST AN EASY BEAT, RIGHT? BECAUSE THAT IS ALSO VERY BACKWARD LOOKING NUMBERS. THEY ARE FOCUSED MORE ON ORDERS GOING INTO THE FUTURE AND ALSO GUIDANCE. THESE NUMBERS ACTUALLY DERIVATIVELY RIGHT NOW WE'VE SEEN SOME SOLID COMMENTARY FROM THE COMPANIES THAT HAVE ALREADY REPORTED, BUT I THINK, AGAIN, AFTER SUCH A BIG LOSS OF CONFIDENCE IN RECENT WEEKS AND MONTHS, IT IS REALLY HARD FOR INVESTORS TO JUST JUMP BACK IN ON SOME KIND OF MERELY DECENT NUMBERS. THEY WOULD REALLY REQUIRE SOMETHING, YOU KNOW, EXTRAORDINARY TO ACTUALLY COME INTO THE MAINLAND HARDWARE MARKET. YVONNE: SEAN, WE HAVE REPORTING RESULTS. WHAT DO YOU EXPECT? SEAN: FIRSTLY, WE THINK IT ACCELERATES FROM THE SECOND QUARTER, MAINLY BECAUSE OF THE RAMP UP OF THE TRANSCEIVERS. WE SAW THAT THE COMPANY HAD EXPANDED CAPACITY A LOT, BUT THE OUTPUT HAS NOT CAUGHT UP AS FAST. WE SEE A FASTER RAMP UP THIS QUARTER, DRIVING FASTER EARNINGS GROWTH'S. HOWEVER, THAT'S ONLY GOING TO MEET THE CONSENSUS, NOT BEAT THEM. DAVID: ALL RIGHT, TEAM, FANTASTIC. THANK YOU SO MUCH. THAT WAS SEAN CHEN AT BLOOMBERG INTELLIGENCE, AND LINKING TO -- LIANGTING TU, LISTINGS COMING OUT TODAY. WHY AM I STEPPING AWAY FROM THE STUDIO? THE ONE SUMMIT IN HONG KONG, THE KEY NOTE, FOUNDER OF THE ONE EARTH SUMMIT. AND THE CHINESE MINISTER FOR ICAHN AG BE JOINING US. KEVIN CHOI, THE HONG KONG PERMANENT SECRETARY FOR TECH AND INNOVATION, WILL BE JOINING US. WE HAVE PLENTY MORE AHEAD HERE ON "THE CHINA SHOW." STAY TUNED. GOOD MORNING TO ALL OF YOU. THIS IS BLOOMBERG. ♪ [THEME MUSIC PLAYS] DAVID: GOOD MORNING TO EVERYONE JOINING US ACROSS THE REGION. GOOD EVENING IF YOU ARE JOINING US FROM THE U.S. WELCOME BACK TO "THE CHINA SHOW ." AS I MENTIONED, WE ARE COMING TO YOU FROM THE ONE EARTH SUMMIT, AND OUR NEXT GUEST DRIVES INNOVATION AND TECH STRATEGY COME OF REALLY R&D THAT FITS IN THE BIG PICTURE BIT OF JOINING US ON SET IS KEVIN CHOI, HONG KONG'S PRIMITIVE SECRETARY FOR INNOVATION, TECH, AND INDUSTRY. GOOD MORNING IN NICE TO SEE YOU, FINALLY. SEC. CHOI: GOOD MORNING, DAVID. DAVID: YOUR PORTFOLIO SPECIFIC, WHAT DO YOU OVERSEE, WHAT ARE THE CURRENT GAPS, AND WHAT ARE YOU LOOKING FOR UPGRADES? SEC. CHOI: WELL, YOU KNOW INNOVATION AND TECHNOLOGY WILL BE A DRIVING FORCE NOT JUST FOR HONG KONG BUT FOR THE WORLD. HONG KONG IS IN THE SECTOR, AND WE NEED TO GROW A REAL ECONOMY BEYOND THE FINANCE SECTOR. SO IT IS NATURAL FOR INNOVATION AND TECHNOLOGY TO TAKE THIS STAGE, AS THE GROWTH ENGINE OF HONG KONG. AND ALSO, YOU KNOW THAT WE ARE ALREADY KICKSTARTING HOW WE DEVELOP AND LAUNCH THE METROPOLIS, ADVANCED LANDMARKS BETWEEN HONG KONG, WITH IN HONG KONG, OF COURSE, BUT ALSO ADJACENT TO THE CHINESE MAINLAND. THIS IS AN IMPORTANT DEVELOPMENT FOR HONG KONG, BUT WE NEED TO FILL IN WHAT KIND OF INDUSTRIES THAT ARE HIGH-VALUE ADS AND ALSO THAT SHAPE HONG KONG. IT GOES WITHOUT SAYING THAT INNOVATION AND TECHNOLOGY WILL BE THE KEY, AND GREEN TECHNOLOGY, LIKE THE ONE THAT WE ARE PROMOTING TODAY ON ONE EARTH SUMMIT AND ALSO THE DAY BEFORE, BRINGING INNOVATION CONFERENCE. THESE ARE IMPORTANT AREAS NOT JUST FOR HONG KONG BUT GLOBALLY ON THE SUSTAINABLE DEVELOPMENT. SO MY TASK IS TO ENSURE THAT SOME NEW THINGS PAST, APART FROM THE SCIENCE PACT WE NOW HAVE, WE ARE NOW DEVELOPING THE HONG KONG PACT, WHICH IS REALLY ADJACENT TO THE SHENZHEN RESOURCE, SHENZHEN, THE POWERHOUSE OF INNOVATION OF CHINA, AND THEN, OF COURSE, OTHER ASPECTS LIKE, AS YOU SAID, THERE ARE GAPS BETWEEN A VERY STRONG ACADEMIC BACKGROUND HONG KONG ALREADY HAS, WE HAVE FIVE TOP HUNDRED UNIVERSALLY RECOGNIZED UNIVERSITIES, BUT THIS NEEDS TO COME TO COMMERCIALIZATION. THESE ARE NOW FILLING IN THROUGH GOVERNMENT FUNDING, THROUGH SUPPORT PROGRAMS, THROUGH THE TAX DEVELOPMENT, ETC. DAVID: YEAH. ALL OF THESE GRADUATES WANT TO FIND JOBS IN THESE MARKETS. FOR CLARITY, HOW MANY A PARTAKE IN STRUCTURING RIGHT NOW? HOW MANY PARTS WILL THERE BE? SEC. CHOI: WE HAVE THE SCIENCE PACT THAT ALSO COMBINES WITH OTHERS, IN THE INDUSTRY SPACE, WE'VE OF DEGRADED, SO THESE ARE THE RANGES, THE MAINSTREAM PACTS. WE HAVE THE CYBER PORT IN THE SOUTHERN PART OF HONG KONG. BUT THE LAST IS THE FAVORITE LANDMARK WE ARE DEVELOPING, ONE-THIRD OF HONG KONG, LANDMARK SIZE. AND WE ARE DEVELOPING NEW PATHS. FIRST OF ALL, ADJACENT TO THE SHENZHEN PACT, WHICH IS 87 HECTARES, WHICH IS FOUR TIMES THE PACT NOW. AND IT IS UNTENABLE, ANOTHER 200 HECTARES FACT, THAT WILL BE FOCUSING ON IT, TOO. THE THIRD ONE IS FURTHER SOUTH OF THE HONG KONG, BUT IT IS STILL IN THE METROPOLIS, SO THESE THREE PARTICULAR NEW PACTS WILL BE COMING FIVE TO 10 YEARS, THE FOCUS ON HOW EXACTLY WE ARE DOING I IN OTHER ADVANCE INDUSTRIES, AND TO SUPPORT THE ECOSYSTEM. DAVID: THINGS THAT MICROELECTRONICS HAVE FELT ARE PART OF THE PORTFOLIO. SEC. CHOI: CORRECT. THERE ARE QUITE A FEW AREAS THAT WE ARE FOCUSING ON. GREEN ENERGY IS ONE, AND ON TOP OF THAT, LIFE AND HEALTH SCIENCE WILL BE AN IMPORTANT ONE, WHICH IS PART OF HUMANKIND, AND THEN AI, OF COURSE, AND CHIP MANUFACTURING WILL BE ANOTHER ONE. DAVID: HOW MANY JOBS DO YOU THINK THIS WILL SAVE? SEC. CHOI: IT IS DIFFICULT TO SAY, BECAUSE HONESTLY THE JOB CREATION GOES WITH THE -- HOW SUCCESSFUL WE ARE GOING TO BE DOING ON THE USE PACTS. BUT TO TAKE AN EXAMPLE, IT'S LIKE TENS OF THOUSANDS OF JOBS THAT WE HAVE BEEN CREATING THROUGH THE SCIENCE ACT. SO SAY, JUST, FOR EXAMPLE, IT WILL BE LIKE 10 TIMES AT LEAST, IF NOT 20 TIMES OF THE SCIENCE PACT WE CURRENTLY HAVE. SO WE ARE HOPING THAT IT WILL CREATE LIKE TENS TO HUNDREDS OF THOUSANDS OF JOBS. SUPPORTING IND AND SUPPORTING THESE INDUSTRY SECTORS, TOO. DAVID: WHAT ABOUT MANUFACTURING? YOU MENTIONED GREEN TECHNOLOGY. EV'S, FOR EXAMPLE, ONCE THE PRIDE OF HONG KONG. ARE THERE OCTAVE DISCUSSIONS AROUND THAT? SEC. CHOI: I WOULD HAVE TO SAY THAT, OF COURSE, HONG KONG IS STILL SMALL IN TERMS OF LANDMASS, ETC., WHEN YOU TALK ABOUT MASS PRODUCTION. SO WHEN YOU TALK ABOUT HOW EXACTLY WE ARE GOING TO PARTNER WITH THE WHOLE GREATER BAY AREA, WE SHOULD REALLY BE FOCUSING ON UPSTREAM, MIDSTREAM, SOME TYPE OF PROTOTYPING, SOME KIND OF SMALL-SCALE PRODUCTION. BECAUSE OF THE NATURAL ADVANTAGE THAT WE HAVE COME OF THE ACADEMIC, STRONG BACKGROUND, AND ALSO THE GOVERNMENT PROGRAMS, SCIENCE PROGRAMS TO HELP INCUBATION, CELEBRATION, AND COMMERCIALIZATION OF OUTCOMES, THESE ARE THE STRONG PACTS THAT HONG KONG SHOULD FOCUS ON. THE REAL MASS PRODUCTION PART, AND ALSO, IN SOME WAY, SOME KIND OF ALSO MORE AFFORDABLE AND SCIENTIFIC AND ENGINEERS, THEY COME FROM MAINLAND CHINA, TOO. IN A WAY, YOU CAN TELL SHANE GOODSON THAT SHENZHEN, HONG KONG, GW UANDHOU ARE IN THE RANKING, AND IT TELLS A LOT THAT WE ARE HONG KONG, NOT ALONE IN DOING THIS. IT MUST BE A PARTNERSHIP WITHIN THE WHOLE GREATER BAY AREA, TOGETHER WITH SHENZHEN, HONG KONG, AND OTHER CITIES, AND GREEN ALLERGY WILL BE ONE OF THEM. DAVID: I THINK YOU'VE BEEN ON THE JOB ABOUT A YEAR. SEC. CHOI: THAT IS CORRECT. DAVID: AI HELPS. [LAUGHTER] KIDDING ASIDE, WHAT KINDS OF COMMITMENTS HAVE YOU RECEIVED SO FAR FROM FOREIGN COMPANIES, WHETHER THEY SIGNED LEASES? I KNOW LEASES ARE NOT CHEAP FOR EXAMPLE. SEC. CHOI: LOOKING AT THE HONG KONG PACT TO SHOWCASE THAT MARKET CONFIDENCE IS PICKING UP. THE HONG KONG PACT COMMENCE OPERATION LAST DECEMBER, SHORTER THAN A YEAR, BUT IT ALREADY ATTRACTS 100 ENTERPRISES TO JOIN THE THE HONG KONG PACT, BUILDING FIVE MORE BUILDINGS, MENTORING -- ENTERING INTO THE PRE-RENDERING AGREEMENT, AND SOME OF THEM HAVE ALREADY DONE THE RIGHT HALF OF THAT. FURTHERMORE, BEYOND THAT, WE ARE ALSO HANDING OUT SOME PARCELS FOR THE PRIVATE SECTOR TO DIRECTLY BUILD THEIR OWN LABORATORIES THERE, WITH PACKAGES, AND LIKE 15 SUBMISSIONS. THEY ARE ALL VERY HIGH QUALITY SUBMISSIONS, FROM REAL SCIENTIFIC RESEARCH AND DEVELOPMENT COMPANIES. THEY WANT TO BUILD LABORATORIES, AND ALSO THEY WANT TO BUILD THEMSELVES. SO IT IS A VERY STRONG COMMITMENT FROM THE PRIVATE SECTOR, THAT THEY BELIEVE IN HONG KONG'S IND INITIATIVES AND ALSO BELIEVE IN THE HONG KONG PACK, BECAUSE IT IS NOT JUST A HONG KONG INITIATIVE COMMENCE A NATURAL ONE THAT THE NATIONAL GOVERNMENT HAS ALREADY DETACHED. THEY WILL ALLOW SOMETIMES OF COURSE INNOVATION, ELEMENTS, TO BE FREELY THROWN BETWEEN SHENZHEN AND HONG KONG. SO THESE ARE THINGS THAT CAN BE CREATED IN OTHER PARTS OF HONG KONG, NOR MAINLAND CHINA, NOR THE WORLD, BECAUSE WE CAN HAVE MAINLAND SPACES, OR OVERSEAS AND HONG KONG DATA DOING THE JOB OVER IN THE PACK, WHICH REALLY MAKES SENSE WHEN WE TALK ABOUT IND. IF THE OPENNESS THAT HELPS IT THRIVE. DAVID: THAT'S ALL WE HAVE TIME FOR TODAY. LET'S CONTINUE FOR A LONGER CONVERSATION IN THE FUTURE. KEVIN CHOI, THANK YOU SO MUCH, PERMANENT SECRETARY FOR INNOVATION, TECHNOLOGY, AND INDUSTRY HERE OF HONG KONG, OF COURSE DID WE WILL HAVE MUCH MORE HERE FROM THE ONE EARTH SUMMIT. WE WILL HAVE THE FOUNDER, OF COURSE, OF THE ONE EARTH SUMMIT, POMAN LO WILL BE JOINING US. PLENTY MORE AHEAD HERE ON "THE CHINA SHOW." GOOD MORNING. YVONNE: ALL RIGHT, WE ARE STILL WATCHING WHEN IT COMES TO THE KIWI THIS MORNING, THE RBNZ IN A TAILSPIN TO KEEP THIS UNCHANGED. THIS WAS LARGELY UNEXPECTED FROM THE STREETS HERE TODAY. THE KEY WE WILL CONTINUE TO SLIDE AGAINST MOST OF ITS PEERS THIS MORNING. 56 U.S., THE AUSSIE KIWI PAIR THERE. REALLY YOU SEE THE RBA REALLY A LITTLE MORE HAWKISH, THE RBNZ LITTLE MORE DOVISH, AND THAT IS WHERE YOU SEE IT. OTHER KIWI ASSETS TO TELL YOU ABOUT, THE BOND MARKET MOVING ON THE SHORT END OF THE CURVE. BID ON FROM THOSE DOVISH COMMENTS FROM THE RBNZ. WE HAVE THE GOVERNOR SPEAKING AT ABOUT AN HOUR OR SO ON INSIDE AS WELL. KOSPI, NIKKEI, TAIWAN, HSI LOOKING LIKE THIS, SK HYNIX CERTAINLY LISTING, GAINS OF MORE THAN 6% RIGHT NOW. TOKYO AS TAIWAN BOTH DOING QUITE WELL HERE. HANG SENG, THERE YOU GO, ONCE AGAIN, NOT REALLY PARTICIPATING OR FLAT ON THAT BENCHMARK. SOME OF THE CONSUMER NAMES, AS TRAVERSED REPORTING EARNINGS -- AFTER REPORTING EARNINGS, THIRD QUARTER FROM POP MART FALLING. LUGO MAYBE NOT AS COOL ANYMORE. WUL IANGYE ALSO. SK HYNIX IS ALSO LISTED. WE GOT SOME GREAT EARNINGS, AS WELL. DAVID: WE HAVE SOME OTHER EARNINGS AS WELL COMING THROUGH TODAY, LIKE THE BROADER HARDWARE STORY, I THINK THE SK HYNIX STORY IS REALLY AT THE CRUX AT THAT -- OF THAT. SOME OF THE LEVERAGED ETF'S WE HAVE IN HONG KONG ARE FLYING ON THE BACK OF THIS NEWS. WE HAVE PLENTY MORE AHEAD, OF COURSE, THE KOREA LISTING, THAT WE WILL UNPACK FURTHER. AT THE CHINA BEAR MARKET. MORGAN STANLEY JOINS US FOR THEIR STRATEGY NEXT. THIS IS "THE CHINA SHOW." ♪ DAVID: WELCOME BACK. YOU ARE WATCHING "THE CHINA SHOW." THE RALLY WE ARE SEEING ACROSS ATTACK TO THE LEFT IS WHERE I AM AT THE ONE EARTH SUMMIT. THAT IS CY LONG. SHORTLY AFTER HE WRAPS UP HIS OPENING REMARKS -- HE IS TALKING ABOUT CLIMATE HEALTH AND CHINA'S ROLE IN THE GREEN TRANSITION -- WE ACTUALLY GET THE OFFICIAL REMARKS. WHICH I BELIEVE WE ARE SEEING NOW. BASED OFF THE AGENDA, IT'S CHINA'S MINISTER OF ECOLOGY AND THE ENVIRONMENT SET TO TALK ABOUT THE GREEN TRANSITION AND THE NEXT CHAPTER AS FAR AS THAT STORY IS CONCERNED. IN THIS HOUR, HONG KONG FINANCIAL SECRETARY PAUL CHAN IS ALSO SET TO SPEAK. WE WILL BRING YOU THOSE LINES WHEN WE HAVE MORE. IN THE MEANTIME, THERE IS A SEPARATE BUT EQUALLY BOUNTIFUL CONVERSATION AROUND THESE MARKETS AND VARIED STRANDS, FROM EARNINGS TO HARDWARE, TO GUIDANCE, TO TOYS FOR THE GROWN-UPS, AND TOYS FOR THE YOUNG AT HEART, WHICH IS THE POCKMARKED STORY. A LOT OF TOPICS TODAY. YVONNE: IT CONTINUES TO LEAN TOWARD THIS K-SHAPED ECONOMY WE ARE SEEING IN CHINA, WHERE YOU CONTINUE TO SEE THE RUNWAY WHEN IT COMES TO AI TRADE. MEMORY CHIPS, ACCORDING TO SK HYNIX, SOLD OUT THROUGH 2029. THAT DEMAND IS INSATIABLE FOR THE NEXT THREE YEARS. THAT WAS ENOUGH TO GET THE MARKET EXCITED ABOUT ALL THESE EARNINGS WE ARE ABOUT TO GET, FROM THE TECH GIANTS IN THE U.S., HYPERSCALERS AND THE LIKE, AND REIGNITING THIS AI TRADE IN THE REGION. WHEN IT COMES TO CHINESE STOCKS, YOU ARE FOCUSING MORE ON THE CHIPPED SIDE, THANKS TO SK HYNIX. YOU ALSO HAD A SMPTE SALES JUMPING 49% ON THAT AI DEMAND. THE CHIP UNIT DID MISS SALES, BUT WITH THAT STOCK, WE ARE STILL SLIGHTLY HIGHER. THE REST OF THE MARKET IS BENEFITING FROM SK HYNIX AND GEN X ME, UP SOME 13 PERCENT. ASIAN MARKETS ARE LIFTING NORTH ASIA WHEN IT COMES TO SOUL. KOSPI, 6% GAINS. THE TOPIC IS NOT DOING AS MUCH, BUT THE NIKKEI IS DOING QUITE WELL. IT IS LIFTING ALL BOATS IN TERMS OF THE AI TRADE. WE HAVE SOME BIG AI HARDWARE NAMES REPORTING AND CHINA AS WELL. AS SEAN CHAN FROM BLOOMBERG INTELLIGENCE IS SAYING, THE DRAWDOWN WE ARE SEEING IN SOME OF THESE PCB MAKERS, OPTED LINKS AND THE LIKE, ISN'T SOMETHING THAT CRACKS THE FUNDAMENTALS, BUT ABOUT THE TRADE TENSIONS, EXTERNAL FACTORS THAT WEIGH ON THAT SECTOR. WE ARE WAITING AND HEARING MORE FROM THE CHINA ENVIRONMENT MINISTER SPEAKING AT THE ONE EARTH SUMMIT. LET'S BRING BACK BLOOMBERG MARKETS REPORTER ANTHONY STEPHENS TO TALK THROUGH SOME OF THE TECH DRIVERS TODAY. ANTHONY: SK HYNIX HAS LIT THE FIRE UNDER THE ENTIRE MEMORY TRADE IN KOREA, IN JAPAN WITH KIOXIA, BUT ALSO CHINA AND TAIWAN. IT IS THE GUIDANCE YOU WERE TALKING ABOUT, WHERE IT'S NOT JUST MEMORY. MEMORY DOES NOT LIVE IN ISOLATION, IT IS CONNECTED TO OTHER THINGS. MEMORY ADJACENT TRADES ARE DOING WELL. SUBSTRATE NAMES DOING WELL, PRINTED CIRCUIT BOARD NAMES RECOVERING FROM A SELLOFF. WE HAD THE U.S. ECOSYSTEM EXPAND OUT OVERNIGHT. WE HAVE TALKED ABOUT ORACLE AND OPENAI BUYING GOOGLE TP USE, AND WE ARE STARTING TO SEE THE ASIAN INVESTOR BASE LEAN INTO THAT. ACROSS THE REGION, WE SEE MEMORY DO QUITE WELL. WHAT'S INTERESTING IS CHINA IS PARTICIPATING TODAY. CHINA IS LAGGING KOREA'S MANIC MOVE, BUT THAT'S A BIG BREAK FROM YESTERDAY WHERE IT LACKED BY 5%. IT IS HELPFULLY LED BY SEMICONDUCTOR NAMES. INGENIC IS AN INTERESTING NAME TO ME, SPEAKS TO ONE OF CHINA'S STRENGTHS. IT MAKES PROCESSORS FOR EMBEDDED COMPUTING, LIKE SMART CAMERAS AND ROBOTS AND CARS. THAT PLAYS TO CHINA'S MANUFACTURING INDUSTRIAL ADVANTAGE, AND IT'S GOOD TO SEE LEADERSHIP FROM THIS KIND OF STOCK IN TODAY'S MARKET. YOU CONTINUE TO SEE CATALYSTS STRUGGLE, AND THE KIND OF BIG CAP CHINA STRUGGLE. WHILE THE AI TRADE DOES WELL. CHINA IS IN A MIXED PLACE. KOREA AND TAIWAN, GUNS BLAZING TODAY. INTERESTING TO SEE WHETHER THAT SENTIMENT SURVIVES THE HANDOVER TO INDIA WITH THE GEO IPO, AND WE HAVE THAT OVERALL EQUITY OPTIMISM, OR IT STAYS ISOLATED INDITEX TRADE. DAVID: JUST MAYBE A WORD ON -- TO YOUR POINT, IT SEEMS THE KOREA-TAIWAN STORY SEEMS TO BE THE CLEANEST AND SIMPLEST THEME ACROSS MARKETS TODAY. ON THE NEGATIVE SIDE, IT IS STILL CLEAN AND CLEAR. THE BOTTOM OF THIS K-SHAPED ECONOMY. THE POP MART NAMES AND LACK OF A BIG HIT TODAY. HOW ARE YOU LOOKING AT THE CONSUMER FACING NAMES? AND THE BOOZE MAKER, WHICH IS THE OTHER WEAK SPOT TODAY. ANTHONY: WE CONTINUE TO SEE CONSUMER DELEVERAGING IN CHINA. THE PROPERTY MARKET IS THE FULCRUM AROUND WHICH DELEVERAGING HAPPENS. PEOPLE ARE UNDERWATER ON THAT EQUITY. AS LONG AS THE PROPERTY MARKET DOESN'T TURN, THEY HAVE TO MECHANICALLY ADJUST THEIR SPENDING. PEOPLE KNOW THEIR NET WORTH HAS COME DOWN, AND THE STOCK MARKET IS NOT HELPING. THAT WAS SUPPOSED TO BE THE OFFSETTING FACTOR. YOU ARE SUPPOSED TO HAVE A RALLY IN STOCKS OFFSETTING THE PROPERTY DOWNTURN, BUT NOW THE CHINESE AVERAGE CONSUMER HAS GOTTEN HIT ON BOTH SIDES. YOU ARE SEEING CONSUMPTION DRAWDOWN ACROSS THE WEB. WE ALSO SAW WEAK CHINA NUMBERS FROM THE GLOBAL LUXURY PLAYERS. EVEN HERMES COULD NOT OFFSET THAT. WE ALSO HAD REGIONAL CONSUMPTION PROBLEMS JUST FROM HIGH OIL PRICES, NOT JUST THE CHINESE STRUGGLING. INDIANS AS WELL, EVEN THOUGH THAT ECONOMY IS GROWING. YOU SAW PRETTY POOR EARNINGS FROM THE LIKES OF INTERNAL AND SWAGGY AND THAT'S JUST BASIC RESTAURANT ORDERING. THERE IS A BIFURCATION OF ANYBODY INVOLVED IN TECH IS CRUSHING IT. IF YOU ARE INVESTED IN TECH, YOU ARE CRUSHING IT. ANYTHING ELSE, YOU ARE STRUGGLING. DAVID: THANK YOU, ANTHONY STEPHENS, OUR MARKETS REPORTER. LET'S TAKE YOU TO THE BIG STORY THAT EMERGED, THIS RATE DECISION IN NEW ZEALAND AND THE UNEXPECTED HOLDING IN TERMS OF MONETARY POLICY SETTINGS. THE GOVERNOR AND ONE OF THE NEW SIGNS FROM THE NEWS CONFERENCE TAKING PLACE IS TIGHTER MONETARY POLICY WILL BE REQUIRED. THIS IS AN ONGOING BRIEFING AND THAT IS WHAT I UNDERSTAND TO BE A POWERPOINT SLIDE FROM THAT PRESENTATION. I THINK THE MARKET ITERATION IS A LOT IN THE MARKET WERE CAUGHT OFF GUARD BY THIS MOVE TO SET ON RATES FOR NOW, AND THIS MASSIVE REPRICING ACROSS THE FX SPACE. YIELDS REACTING. THE KIWI DOLLAR DOWN AGAINST EVERYTHING, DOWN AGAINST THE AUSSIE DOLLAR THE MOST SINCE 2017. IT'S A SIZABLE MOVE AS IT PERTAINS TO THE KEYWAY. YVONNE: AS YOU MENTIONED, A THREE SIGMA DROP WITH THE KIWI AND THE AUSSIE. WHEN YOU ADD THAT TO THE RBA, WHICH WAS MORE HAWKISH, AND YOU HAD A HOT INFLATION PRINT EARLIER THIS MORNING, SO THAT ADDS TO THE PAIN TRADE. THE FACT THAT THE GOVERNOR OF THE RBNZ ALSO MENTIONED SHE WAS THE ONE VOTING FOR RATES TO THIS DAY WAS MAY BE A BLOW TO INVESTORS WHO WERE EXPECTING A HIKE TODAY, AND MAY BE MORE TIGHTENING IN THE NEAR TERM. LET'S BRING IN RUTH CARSON, OUR CHIEF CORRESPONDENT FOR FX AND RATES IN ASIA. HOW SHOCKED WERE SOME OF THESE QE TRADERS TODAY? AND WHAT'S THE READTHROUGH WE ARE SEEING RIGHT NOW? RUTH: WITHIN TWO MINUTES OF THE DECISION, I ALREADY HAD MESSAGES COMING THROUGH, TALKING TO PEOPLE ON THE STREET. THE CONSENSUS, THE KIWI GETS DEMOLISHED. WE KNOW THIS IS A CENTRAL BANK HEAVY WEEK. TRADERS ARE ON TENTERHOOKS AND THIS CAUGHT TRADERS BY SURPRISE. THEY DON'T LIKE IT. I DON'T LIKE IT WHEN THEY HAVE BEEN EXPECTING A HIKE BY THE RBNZ ED. ONLY TWO ECONOMISTS REJECTED FOR THE RBNZ TO STAY ON HOLD. EVERYONE ELSE EXPECTED A HIKE, MARKETS PRICING FOR A HIKE. THAT'S WHY WE ARE SEEING SUCH SEISMIC MOVES IN THE KIWI, DOWN AGAINST EVERY MAJOR CURRENCY, DOWN MASSIVELY AGAINST THE AUSSIE. 2017 WAS RIGHT IN TERMS OF WHERE AUSSIE-KIWI MOVED TO. THIS SHOWS HOW JITTERY PEOPLE ARE. WE HAVE A FED COMING UP, BOJ ON FRIDAY, RBNZ TODAY. ANYBODY THOUGHT IT WAS A PRETTY DONE DEAL. THEY WERE WRONG. DAVID: I AM LOOKING ON THE TWO YEAR YIELD. AS AN EXAMPLE OF THE POSITIONING TRADERS HAVE BEEN BUILDING GOING INTO THE FED DECISION. THERE HAVE BEEN A LOT OF BUYING IN RECENT SESSIONS AROUND THE TREASURY SPACE. WHAT IS THE RISK TO THESE POSITIONS AS WE GO INTO THE FED MEETING LATER TODAY? RUTH: IT'S PRETTY INCREDIBLE WHEN YOU LOOK AT TREASURIES, HOW TWO WEEKS AGO PEOPLE WERE STILL FLEEING THE MARKET AND NOW PEOPLE ARE BUILDING THOSE OLDISH POSITIONS AGAIN. WE SAW AI WOBBLES EARLIER AND PEOPLE SELLING, YIELDS WHERE THE TREASURY CURVE FROM TWO ON WORDS WERE FIVE OR HIGHER FOR YIELD LEVELS, WHY NOT BUY? IT HAS GAINED QUITE A BIT OF MOMENTUM. THE TWO YEAR IN PARTICULAR IS SENSITIVE TO POLICY CHANGES BY THE FED, IF WE GET SOME HAWKISH COMMENTARY. WE COULD DEFINITELY SEE SOME BLOWS TO THOSE POSITIONS. IT COULD WASH OUT A COUPLE AS WELL IF THEY COME IN HOT. VERY MUCH ON TENTERHOOKS, AND WE KNOW THE FED IS LIKELY GOING TO STAY ON HOLD TODAY AND THE PRICE OF A HIKE IS IN FOR DECEMBER. LET'S SEE IF CENTRAL BANKERS PLAY BALL. YVONNE: TELL US ABOUT WHAT INVESTORS ARE SIGNALING WHEN IT COMES TO THE VALUE IN TREASURIES. HAVE THEY CALLED THE PEAK WHEN IT COMES TO YIELDS? WHO ARE SOME OF THE BIG BUYERS OUT THERE? RUTH: THAT'S THE MULTITRILLION DOLLAR QUESTION, DO YOU ACTUALLY BUY BIG INTO TREASURIES OR NIBBLE? WE HAVE SEEN THE NIBBLING, SEEN PEOPLE BUY, BUT JUST HOW MUCH DO YOU HOOVER? THERE ARE BIG NAMES THAT HAVE SAID IT'S TIME TO BUY. J.P. MORGAN ASSET MANAGEMENT, A MULTITRILLION DOLLAR ASSET MANAGER, ARE BULLISH ON LONG DATED TREASURIES. TENS, 20'S, 30'S. BLACKROCK HAS TURNED OVERWEIGHT ON U.S. TREASURIES. THESE ARE BIG NAMES. MARKETS LOVE SIGNALING. THEY TAKE IT FROM THE BIG GUNS THAT IT'S TIME TO BUY. LET'S HOPE THAT THE GAINS STAY. YVONNE: RUTH, ALWAYS GOOD TO HAVE YOU, CHIEF CORRESPONDENT FOR FX AND RATES IN ASIA. OUR NEXT GUEST REMAINS CAUTIOUS WHEN IT COMES TO CHINESE EQUITIES. STILL PREFERS A-SHARES AS THE NATIONAL TEAM PROVES READY TO STEP IN. WE HAVE THE INTERVIEW FROM THE RBNZ GOVERNOR ON INSIGHT, 11:30 A.M. HONG KONG TIME, 4:30 P.M. WELLINGTON. LAURA WANG AS WELL COMING UP NEXT. THIS IS BLOOMBERG. ♪ DAVID: YVONNE: CHECKING WHEN IT COMES TO CHINESE MARKETS. A LOT OF QUESTIONS ABOUT WHEN WE SEE THAT BOUNCEBACK. THERE ARE A LOT OF TECHNICALS, HOW THINGS ARE LOOKING OVERSOLD. EARNINGS IS THE NEXT DRIVER ON WHERE THE DIRECTION OF TRAVEL DICTATES. MORGAN STANLEY CAME OUT WITH AN INTERESTING NOTE SAYING WHEN IT COMES TO HISTORICAL VALUATIONS, MAYBE WE HAVEN'T HIT THAT TROUGH JUST YET. LET'S BRING IN THE OFFER -- AUTHOR OF THAT REPORT, LAURA WANG, CHIEF CHINA EQUITY STRATEGIST, TO WALK US THROUGH WHERE YOU SEE THE BOTTOM IN THE CHINA EQUITY MARKET. >> THE MARKET HASN'T DONE THAT WELL YEAR TO DATE, AND WHEN YOU LOOK AT HOW THE CORRECTION HAS ACCELERATED SINCE AUGUST, ALMOST THE ENTIRETY YEAR TO DATE CORRECTION HAPPENED SINCE AUGUST. A LOT OF INVESTORS HAVE COME TO US TO ASK WHETHER WE HAVE ALREADY HIT THE BOTTOM AND WHETHER THIS IS THE ABSOLUTE TROUGH WE HAVE SEEN. IF YOU LOOK AT WHAT HAPPENED DURING THE GREAT FINANCIAL CRISIS OR WHAT HAPPENED AT THE BEGINNING OF THE COVID CRISIS, VALUATION SUGGESTS THERE COULD BE ANOTHER 10% TO 15% DOWNSIDE. WE ARE NOT SAYING THE MARKET HAS TO DROP THAT MUCH BEFORE WE CAN GO UP. WE ARE ALSO WATCHING FOR OTHER SIGNS AND WE THINK VALUES ARE STARTING TO EMERGE IN CERTAIN SECTORS OR SEGMENTS. YVONNE: WHY DO YOU THINK SETTLEMENT HAS BEEN SO WEAK? DO YOU THINK IT'S MORE ABOUT WHAT'S HAPPENING DOMESTICALLY? HIGHER RATES IN THE EXTERNAL ENVIRONMENT? IT IS STANDING OUT AGAINST THE AI OPTIMISM REIGNITING ACROSS THE REGION NOW. LAURA: I THINK A COMBINATION OF BOTH. THE HONG KONG MARKET HISTORICALLY HAS ALWAYS BEEN SENSITIVE TO RISING YIELDS AND TIGHTENING GLOBAL LIQUIDITY, BECAUSE OF THE U.S. DOLLAR-HONG KONG DOLLAR SYSTEM, AND ALSO BECAUSE THE HONG KONG MARKET HAS SO LITTLE CAPITAL CONTROL MECHANISM THAT WHEN GLOBAL LIQUIDITY TIGHTENS, HONG KONG TENDS TO SERVE AS THIS ATM FOR GLOBAL INVESTORS. THE ASIAN MARKET TENDS TO CORRELATE MUCH LESS WITH THE GLOBAL MARKET. FOR THIS CYCLE, IT'S VERY DIFFERENT. THE AI THEME, THE GLOBAL SUPER EXPANSION THEME, MOST ARE LISTED IN THE ASIAN MARKET, AND THIS EXPLAINS WHY THE CORRECTION HAS BEEN SO HUGE IN THE ASIA'S SINCE THE SECOND HALF OF THIS YEAR. THERE ARE SOME IDIOSYNCRATIC REASONS. LAST WEEK WE SAW THE WORST SINGLE DAY CORRECTION FOR THE HANG SENG TECH INDEX. THAT WAS TRIGGERED BY THE OVER TO CRS TRUST TAX PAYMENT DEADLINE. THE DEADLINE SHOULD NOT TRIGGER A LOT OF SELLING BY ITSELF, BUT OUR UNDERSTANDING IS GLOBAL INVESTORS ARE NOT FAMILIAR WITH THE SEQUENCE OF EVENTS AND THEY OVERREACTED TO THAT. THERE IS ALSO A CONCERN ABOUT PLATFORM COMPANIES, E-COMMERCE PLAYERS' MARGINS BECAUSE OF THE WEAKENING CONSUMPTION. DAVID: NICE TO SEE YOU, DAVID HERE. CAN I PICK UP ON SOMETHING YOU JUST MENTIONED ON THE A SHARE MARKET? WHICH WE KNOW HISTORICALLY ISN'T AS CORRELATED TO GLOBAL MARKETS AS THEM TO EACH OTHER. ISN'T THE ASIAN MARKET NOW MORE CLOSELY CORRELATED WITH? THE U.S. EQUITY MARKET WHAT ARE YOU SEEING AS FAR AS THAT RELATIONSHIP IS CONCERNED, AND CAN THAT RELATIONSHIP -- COULD THAT MAY BE USHER IN A CLOSING OF THAT GAP? THE ASIAN MARKET HAS ALSO NOT BEEN DOING WELL. LAURA: YOU ARE ABSOLUTELY RIGHT. WE HAVE BEEN EMPHASIZING TO THE INVESTORS THAT ASIAN MARKETS CORRELATION THIS TIME AROUND WITH THE GLOBAL MARKET, PARTICULARLY THE AI THEME, CAPEX EXPANSION THEME, IS MUCH HIGHER THAN PREVIOUS HAVE SEEN. THIS IS BECAUSE THE CONCENTRATION OF THE ASIAN MARKET COMPOSITION HAS SHIFTED HEAVILY TOWARD THE ATTACK AND INNOVATION STOCKS AND INDUSTRIES. THE CSI 300, NOW OVER 40% OF THAT INDEX IS ALLOCATED TOWARDS THE TECH INNOVATION SECTORS, COMPARED TO THE HANG SENG INDEX, WHICH IS LESS THAN 15%. WHEN THE GLOBAL MARKET, PARTICULARLY THE CONCERNS ABOUT THE AI THEMED SUSTAINABILITY, ABOUT THE CAPEX EXPANSION VULNERABILITY GOING FORWARD, THE RESIGNATION IN THE ASIAN MARKET IS MUCH BIGGER. FOR THE ASIAN MARKET, WE DO HAVE A DISTINCT LIQUIDITY SUPPORT, WHICH IS THE NATIONAL TEAM. WE ARE HAPPY TO SEE THE NATIONAL TEAM HAS COME INTO THE MARKET, TRIED TO STABILIZE IT IN A HIGH-PROFILE WAY. WE THINK THIS SERVES AS A STRONG SIGNAL THAT IN THE NEXT ONE TO TWO MONTHS, WE ARE LIKELY TO SEE THE TROUGHING OUT OF THE H-SHARE MARKET. DAVID: ON THE NATIONAL TEAM FACTOR IN THE ONSHORE MARKETS, WHAT DO YOU THINK WE SHOULD BE WATCHING SPECIFICALLY IN TERMS OF HOW HIGH-PROFILE THE BUYING BECOMES? AND HOW IMPORTANT A SIGNAL THAT WOULD BE, IF WE DO SEE IT PICK UP THERE EVEN FURTHER? LAURA: NATIONAL TEAM PARTICIPANTS IN THE MARKET, IN AND OUT THROUGH THE YEAR. PARTICIPATING IN THE MARKET AND DOING TRADES ITSELF IS NOT SOMETHING NEW. WHAT WE CARE A LOT MORE IS HOW THEY COMMUNICATE THIS SIGNAL TO THE MARKET, WHETHER THEY WANT THE MARKET TO KNOW THAT THEY ARE ENGAGING IN A VERY MEANINGFUL WAY. A FEW THINGS WE HAVE NOTICED OVER THE LAST COUPLE OF WEEKS. THE BUYING BINATIONAL TEAM HAS ACCELERATED IN A BIG WAY. BETWEEN OCTOBER 9 TO OCTOBER 20, THEY HAVE BOUGHT BY OUR ESTIMATE OVER $15 BILLION U.S. WORTH OF POSITIONS. THIS IS ROUGHLY 1/10 OF WHAT THEY HAVE SOLD BETWEEN BEGINNING OF THE YEAR TO THE END OF JUNE, WHEN THE AI THEME WAS BOOMING. SECONDLY, WE SAW THAT THE MAJORITY OF THE BUYING THAT HAD HAPPENED OVER THE LAST SEVERAL WEEKS HAD BEEN CONCENTRATED IN THE STAR 50 ETF'S AND CHINA ASKED ETF'S, AND THAT'S WHERE THE CORRECTION HAPPENED THE MOST. IN ADDITION, BEIJING HAS MOST RECENTLY HOSTED MULTIPLE MEETINGS TO URGE COMPANIES AND GOVERNMENT-BACKED INSTITUTIONAL FUNDS TO BUY EQUITIES, AND TO ASK NATIONAL TEAM TO ACCELERATE BUYING, AND THREE, THEY ALSO ASKED INSURANCE COMPANIES TO REASSESS THEIR EQUITY POSITIONS AND NOT TO UNLOAD UNDERWATER POSITIONS INTO THE MARKET. THE CSRC CHAIRMAN, MOST RECENTLY AT THE FINANCIAL STREET FORUM, MENTIONED STABILITY IS THE NUMBER ONE PRIORITY FOR THE MARKET AT THE MOMENT. WE THINK WITH THE COMBINATION OF THE THREE, THE SIGNAL IS LOUD AND CLEAR. YVONNE: MARA WANG, THANK YOU, CHIEF CHINA EQUITY STRATEGIST AT MORGAN STANLEY. PART OF THIS WEAK SENTIMENT IN THE EQUITY MARKETS IN CHINA IS ADDING TO A POSITIVE SET UP WHEN IT COMES TO GOVERNMENT BONDS. WE SAW WHAT HAPPENS WHEN IT COMES TO THE FIVE-YEAR GOVERNMENT BOND YIELD, TRADING NEAR RECORD LOWS AFTER THE PBOC RAMPED UP LIQUIDITY INJECTIONS INTO THE BANKING SYSTEM. YOU ARE SEEING YIELDS ON THE FIVE-YEAR CONTINUING TO EDGE LOWER. WE ARE BELOW 135 RIGHT NOW. LET'S BRING IN FX AND RATES REPORTER IRIS. TELL US WHAT'S REALLY DRIVING THIS RALLY STILL. >> IT'S THE KEY THEME THIS YEAR THAT REACHED LIQUIDITY IN THE ONSHORE MARKET, STILL DRIVING THE CHINESE RATES LOWER. WE ARE SEEING THE 10 YEAR YIELD ALSO INCHING CLOSER TO THE RECORD LOW. BECAUSE MARKETS ARE WATCHING THE PBOC'S SWITCH TO THE OVERNIGHT RATE AS THE POLICY RATE FROM THE CURRENCY TO THE SEVEN-DAY RATE. PEOPLE REGARD IT AS AN EASING BRIAN'S. YOU'RE CONTINUING TO SEE THE PBOC NOT INJECT LIQUIDITY INTO THE MARKETS FOR THE SIXTH TRADING DAY TODAY. WE ARE HAVING THE OVERNIGHT REPO RATE STILL AT BELOW 1.3%, AND TRADERS ARE TALKING ABOUT ONCE THE LIQUIDITY IS THERE, THEY WILL HAVE MORE ROOM TO TRADE. YVONNE: THEY HAVEN'T COME OUT WITH A RATE YET, RIGHT? >> THEY HAVEN'T. YVONNE: CAN WE CONTINUE TO SEE THIS RALLY GO FURTHER? >> BASED ON THE REPORTS AND ANALYSTS, THEY ARE SEEING MORE ROOM FOR THE YEAR TO GO LOWER. THERE ARE SOME BARRIERS FOR THE 10 YEAR YIELD TO BREACH 1.6 PERCENT, BECAUSE THAT MAY BE THE LOWEST ON RECORD. PEOPLE ARE STILL CIRCULATING THAT THE PBOC IS ON HIGH ALERT, AND SOME PEOPLE ARE EVEN TAKING PROFITS IN RECENT DAYS BECAUSE THEY ARE CONCERNED THE PBOC MAY INTERVENE SOON. WE ALSO HAVE SOME ENTER -- SOME INSTITUTIONS SAY THEY EXPECT THE PBOC TO HAVE VERBAL WARNING IN THE NEXT SEVERAL WEEKS. YVONNE: IRIS, THANK YOU. FX RATES REPORTER ON THE CGD RALLY THAT CONTINUES TODAY, DESPITE EQUITY MARKETS DOING DECENTLY TODAY IN CHINA. PLENTY MORE TO COME. THIS IS BLOOMBERG. ♪ YVONNE: LIVE PICTURES AT THE RBNZ BRIEFING WITH AT THE PODIUM, GOVERNOR ANNA BRANHAM TAKING QUESTIONS FROM REPORTERS ON WHAT WAS THE RATIONALE BEHIND THIS HOLD TODAY. THERE IS OUR COLLEAGUES ASKING THAT QUESTION. SHE HAS STARTED TO ASK MORE ABOUT WHAT THE PATH OF THIS CYCLE LOOKS LIKE, AND LIKELY TO RAISE THE OFFICIAL CASH RATE AT THE COMING MEETINGS. THAT'S WHY YOU ARE SEEING THINGS COMING OFF WHEN IT COMES TO THE PRESSURE IN THE QE AGAINST MOST OF ITS PEERS TODAY, AS WELL AS WHAT WE SEE IN THE BOND MARKET. INTERVIEW WITH THE GOVERNOR COMING UP ON INSIGHT. FROM THE ONE EARTH SUMMIT IN HONG KONG, WE TALKED TO FOUNDER POMAN LO ABOUT AI ENERGY DEMANDS AND HAVE THE POWER THAT GROWTH SUSTAINABLY. THIS IS BLOOMBERG. ♪ YVONNE: 11:29 A.M. IN TOKYO, JAPANESE MARKETS GOING ON A LUNCH BREAK. THE NIKKEI CONTINUES TO EDGE HIGHER. WE ARE SEEING THE OPTIMISM AROUND AI COME BACK, THANKS TO SK HYNIX, THOSE BLOWOUT EARNINGS. THE ANNOUNCEMENT OF THIS SHAREHOLDER RETURN PLAN LIFTING THE MEMORY SIDE OF THINGS, AND DEOXY UP IS THE LEADER ON THE BOARD ON THE NIKKEI, UP 13%. WE ARE FLAT WHEN IT COMES TO DOLLAR-YEN, BUT FROM THE FX SIDE, A SURPRISE MOVE FROM THE RBNZ NOT TO DO ANYTHING WITH RATES. THE JGB 10 YEAR YIELD UP SOMEONE BASIS POINTS. WE COUNT DOWN TO NOT JUST THE FED, BUT BOJ ALSO HAS THEIR MEETING THIS WEEK AS WELL. DAVID: YEAH, LOTS TO CONSIDER. I THINK IT'S IMPORTANT TO CONSIDER WHAT THESE COMPANIES ARE SAYING AND HOW THAT INFORMS POLICYMAKERS WHERE THEIR POLICY-SETTING SHOULD BE IN A YEARS TIME, GIVEN THE MASSIVE BUILD OUTS ACROSS THE AI SPACE, THE CAPEX, THE FUNDRAISING. I WAS OFF TWO DAYS, BUT I HAVE BEEN FOLLOWING ALL THIS FUNDRAISING. IT'S ASTRONOMICAL, THE AMOUNT OF MONEY BEING RAISED AND THEN DEPLOYED INTO THESE MARKETS. GOING TO BE INTERESTING TO SEE HOW THEY BUILD UP IS ABLE TO SUSTAIN, GIVEN THE OTHER THINGS WE NEED FOR THIS TO BE LONGER-TERM FEASIBLE, LIKE THE ENERGY CONSUMPTION, WATER. YOU NEED ALL THESE THINGS. THE ETHICS CONVERSATION COMPLICATES THE MATTER EVEN FURTHER. THAT'S TRY TO TIE THESE THINGS TOGETHER AT THE ONE EARTH SUMMIT. WE ARE JOINED BY THE FOUNDER, POMAN LO. HE IS ALSO WITH THE REGAL HOTELS. VERY NICE TO SEE YOU. >> GREAT TO SEE YOU, AND WELCOME TO THE THIRD ONE EARTH SUMMIT IN HONG KONG. DAVID: I'M WONDERING HOW YOU WERE ABLE TO GET ALL THESE PEOPLE IN THE BUILDING, VERY IMPRESSIVE. THE THEME IS AI FOR THE INTELLIGENT AGE, AND WE HAVE SEEN A LOT OF CONSTRAINTS AROUND RESOURCES, ENERGY, WATER TO COOL THESE DATA CENTERS. HOW DO WE NEED TO BE LOOKING AT THE SUSTAINABILITY ISSUE? BECAUSE YOU ARE CLOSE TO THIS PART OF THE CONVERSATION. POMAN: OBVIOUSLY AI IS LIKE AIR, TRANSFORMING EVERY FACET OF OUR LIVES. I'M NOT ASKING US TO SLOW DOWN THE USE OF AI, BUT WE SIMPLY HAVE TO GUIDE IT THE RIGHT DIRECTION WITH HUMAN WISDOM. I THINK THERE ARE MASSIVE POSSIBILITIES THAT WE WERE ABLE TO EVEN THINK OF. THE QUESTION IS HOW WE CAN ACTUALLY COMBINE ARTIFICIAL INTELLIGENCE WITH HUMAN ETHICS AND VALUES AND MAKE SURE IT IS FULLY ALIGNED. SO THAT THESE AI SOLUTIONS SERVE HUMANITY AND IS SOMETHING WE WANT TO SOLVE. IF WE HARNESS IT THE RIGHT DIRECTION, IT GIVES US HOPE. WE ARE ABLE TO SOLVE PROBLEMS THAT WERE COMPLETELY INSURMOUNTABLE. SO IT IS POSSIBLE TO ACTUALLY DRIVE ECONOMIC GROWTH WITHOUT HAVING THESE EMISSIONS GOING OUT OF CONTROL. THE QUESTION IS HOW WE LEAD IT WITH INTENTION. DAVID: ARE WE CLOSE TO THE THRESHOLD WHERE WE NEED TO BE MAKING HARD DECISIONS NOW? POMAN: DEFINITELY, I THINK THE WINDOW IS NARROWING. AS THESE AI AGENTS AND SYSTEMS ARE BECOMING INCREASINGLY AUTONOMOUS, WE CANNOT AFFORD TO GIVE UP OUR RESPONSIBILITY AND JUDGMENT. WE HAVE TO MAKE SURE WE REMAIN MASTERS OF AI, AND THE ONLY REASON TO DO THAT IS TO MATCH ALL THESE INNOVATIONS WITH THE NEEDS THAT WE HAVE TO SOLVE. THAT IS WHY WE HAVE THE ONE EARTH ECOSYSTEM, SO ALL THE INNOVATIONS ARE CONNECTED TO PAIN POINTS AND PROBLEMS THAT WE, HUMANITY, ARE FACING. AND COLLECTIVELY WE CAN MAKE IT POSSIBLE TO DO WELL BY DOING GOOD. OTHERWISE I THINK EVERYONE IS SIMPLY IN A RACE FOR EVALUATION, SO NO ONE HAS ANY INCENTIVE TO SLOW DOWN. SO WE HAVE TO CREATE THAT ECOSYSTEM TOGETHER SO THESE PURPOSE DRIVEN INNOVATIONS CAN ACTUALLY ACHIEVE COMMERCIAL SCALE, CAN THRIVE, AND MOST IMPORTANTLY REACH THE COMMUNITIES THAT NEED THEM THE MOST. DAVID: A LOT OF THE MONEY THAT'S BEEN RAISED, WHETHER IN EQUITY OR DEBT MARKETS, HAS GONE INTO BUILDING THE HARDWARE AND INFRASTRUCTURE. ON THE ENERGY SIDE, DO YOU THINK ENOUGH HAS BEEN ALLOCATED TOWARDS THE PERIPHERY SUPPORT SECTORS, LIKE ENERGY, LIKE THE GREEN TRANSITION? WE WERE ALREADY HAVING TROUBLE MEETING THE CLIMATE GOALS BEFORE THE AI BUILDOUT. I JUST WONDER WHETHER WE HAVE HAD A DIFFICULT ENOUGH CONVERSATION AROUND BUILDING THE SUSTAINABILITY BACKBONE OF THIS INITIATIVE. POMAN: THAT'S WHY WE HAVE TO HAVE THESE CONVERSATIONS. SOMETIMES WHEN THE ONLY FOCUS IS ON SHORT-TERM ECONOMIC PROFITS, THAT'S WHERE WE ARE FACING THE GREATEST RISK. THAT'S WHY WE NEED TO TAKE A MORE HOLISTIC PERSPECTIVE. ULTIMATELY, WE HUMAN BEINGS CANNOT THRIVE UNLESS WE THRIVE TOGETHER. IF EVERYONE IS JUST FOCUSING ON SHORT-TERM GAINS WITHOUT LOOKING AT THE ROLE THAT, YOU KNOW, HOW OUR WELL-BEING, OUR PROSPERITY AS HUMANKIND IS INTERCONNECTED, THEN ULTIMATELY WE WILL ALL FAIL. I HOPE WE CAN HAVE MORE OF THESE DISCUSSIONS, BRINGING BUSINESS LEADERS, ACADEMIC LEADERS, TECHNOLOGY LEADERS TOGETHER SO WE CAN ACTUALLY MAKE IT POSSIBLE FOR AN IMPACT TO BE MEASURED IN EVERY BUSINESS DECISION. OTHERWISE IT WILL BE VERY DIFFICULT TO LET ANY ISOLATED BREAKTHROUGH BE ABLE TO ACTUALLY SOLVE THESE PROBLEMS. AGAIN, IT HAS TO BE A COLLECTIVE MOVEMENT. DAVID: CHINA IS GOING TO BE CENTRAL TO THIS. WE JUST HAD THE MINISTER FOR THE ENVIRONMENT AND ECOLOGY SPEAK IN THE NEXT ROOM. WHAT STOOD OUT TO YOU IN TERMS OF CHINA'S STRATEGY? POMAN: CHINA'S STRATEGY HAS ALWAYS BEEN TO DRIVE ECONOMIC GROWTH WITHOUT LETTING EMISSIONS GO OUT OF HAND. I THINK THE MAIN PHILOSOPHY IS, AGAIN, THIS THEME OF COLLECTIVE FLOURISHING AND COMMON PROSPERITY. WHILE TECHNOLOGY ADVANCES OBVIOUSLY ARE TRANSFORMING THE WORLD, WE ALSO HAVE TO MAKE SURE NO ONE IS LEFT BEHIND AND THAT THESE SOLUTIONS ARE BENEFICIAL TO THE PEOPLE, TO BUSINESSES, AND IT HAS TO BE GOOD FOR OUR FUTURE AS HUMANITY. DAVID: SPEAKING OF BUSINESSES, YOUR OTHER HAT IS YOU RUN THIS HOSPITALITY GROUP. EVENTS LIKE THIS, AND YOU HAVE HAD LIVE EVENTS IN HONG KONG. MANY CONCERTS, CONFERENCES NEXT YEAR AS WELL. HAVE YOU FELT THAT? POMAN: DEFINITELY. WE HAVE RECEIVED A LOT OF FRIENDS WHO SAY, WOW, HONG KONG IS ENERGETIC. THERE ARE TONS OF EVENTS, ENTERTAINMENT, BUSINESS. DEFINITELY HONG KONG IS PAST ITS DARKEST DAYS, AND THERE ARE NEW OPPORTUNITIES COMING UP. I THINK EVERYONE KNOWS HOW HONG KONG IS ALREADY THE LARGEST GLOBAL WEALTH HUB IN GREEN FINANCE. BUT ALSO WITH ITS SYNERGIES WITH THE GBA, I THINK THERE IS OPPORTUNITIES FOR INNOVATION AS WELL. THE FIRST STEP IS TO ATTRACT THE TALENT. OBVIOUSLY BECAUSE OF GEOPOLITICS, THAT HAS OPENED UP NEW OPPORTUNITIES AND PERHAPS A NEW MANDATE FOR HONG KONG TO BECOME THE MOST INFLUENTIAL GLOBAL EDUCATION HUB. A LOT OF PEOPLE MIGHT NOT KNOW, FIVE OF OUR UNIVERSITIES ARE ACTUALLY IN THE TOP 100 RANKING. THIS HAS ALSO GIVEN US A NEW OPPORTUNITY AT REGAL TO LAUNCH AS FIREHOUSE, A CO-LIVING, CO-LEARNING, CO-CREATION STUDENT HOUSING COMMUNITY. TO ME THAT'S EXTREMELY EXCITING BECAUSE IT HAS BEEN A GREAT CHANCE TO MERGE MY PERSONAL PASSION FOR EDUCATION -- I HAVE BEEN DOING THAT ON A NONPROFIT BASIS FOR ALMOST 20 YEARS -- AND MARRYING THAT WITH OUR FAMILY BUSINESS. FROM AN ECONOMIC POINT OF VIEW, IT MAKES PERFECT SENSE. WE ARE EXPECTING SOON 200,000 STUDENTS. FROM A BUSINESS POINT OF VIEW, THE DISTRIBUTION COSTS ARE MUCH LOWER THAN OTA'S. OFTEN WE WORK DIRECTLY WITH UNIVERSITIES WHERE WE HAVE A CLOSE COLLABORATION, AND ALSO DIRECT TO STUDENTS, OFTEN STUDENT REFERRAL. MARKETING AND DISTRIBUTION COSTS ARE LOWER, AND THEY STAY WITH US THE WHOLE YEAR. OPERATION COSTS ARE LOWER, SAVING ON LABOR, HOUSEKEEPING, CLEANING. AND IT'S A VERY STABLE BUSINESS WITH UPSIDE POTENTIAL. THERE IS A LOT OF ADDITIONAL OFFERINGS WE COULD EXTEND, FROM BREAKFAST TO LAUNDRY TO DAILY HOUSEKEEPING AND EDUCATION PROGRAMS. DAVID: THAT'S ANOTHER BIG TREND. POMAN: WE ALREADY HAVE 1000 STUDENTS WITH US, NEXT YEAR WILL BE EVEN MORE. DAVID: DO YOU SEE MORE CAPACITY MOVING TOWARD STUDENT ACCOMMODATION POMAN: YES, NOT FOR EVERY LOCATION, BUT GIVEN WE HAVE ALMOST 7000 ROOMS IN HONG KONG, THERE ARE CERTAIN LOCATIONS THAT ARE VERY APPROPRIATE BECAUSE THEY ARE ALL IN CLOSE PROXIMITY TO LARGE UNIVERSITIES. DAVID: THE OTHER BIG CHANGE WE HAVE SEEN, SEAMLESS MOVES ACROSS THE BORDER WITH GBA. HOW HAS THAT CHANGED THE COMPETITIVE LANDSCAPE FOR HOTELS? POMAN: THAT HAS DEFINITELY GIVEN HOTELS LIKE OURS AN EDGE IN THE SENSE THAT WE ARE VERY STRATEGICALLY LOCATED. FOR THOSE THAT ARE FURTHER OFF IN LESS PROMINENT AREAS, I THINK IT WILL BE A STRUGGLE, SIMPLY BECAUSE I WAS STAYING AT THIS FIVE-STAR HOTEL ACROSS THE BORDER, BRAND-NEW. IT WAS LIKE $600 AND THE ROOM WAS 500 SQUARE FEET. WE CANNOT COMPETE ON PRICE ALONE. THAT IS WHERE HONG KONG'S LEADERSHIP AND REPUTATION FOR QUALITY FOR THIS INTERNATIONAL IMAGE WOULD REALLY HELP DAVID: THANK YOU, VERY NICE TO SEE YOU. THAT WAS POMAN LO, FOUNDER OF THE ONE EARTH SUMMIT. WE DISCUSSED ALSO THE BUSINESS AND THE INDUSTRY. COMING UP, FROM TOURISM AND OUR LONGING FOR SUSTAINABILITY, THIS BIG STORY. YOU MIGHT HAVE SEEN THIS STORY ON KYLIAN MBAPPE, APOLOGIZING AFTER COMMENTS ABOUT MAO ZEDONG AND THE BACKLASH THAT ENSUED. COMING UP, WE WILL DISCUSS HOW THAT'S HITTING HIS LUCRATIVE TIES AND ENDORSEMENTS TO THE CHINESE MARKET. LOTS MORE AHEAD. THIS IS "THE CHINA SHOW." ♪ DAVID: THE BIG ONE COMING UP, GEO IS SET TO STOP TRADING IN -- START TRADING AFTER -- IN LESS THAN AN HOUR AFTER INDIA'S BIGGEST EVER IPO. MARKET TRACKERS HAD THE SHARES AT 22% ON TUESDAY, RAISED EXPECTATIONS FOR A STRONG DEBUT. OUR SENIOR REPORTER FOR CONGLOMERATES JOINS US. TELL US MORE ABOUT THE MOVE AHEAD OF THIS LISTING. >> THANK YOU FOR HAVING ME. I'M AT THE NATIONAL STOCK EXCHANGE GATE AND THE MOOD IS UPBEAT. WE COULD SEE A LOT OF CROWD GATHERED HERE AND HEAVY SECURITY. WE ARE EXPECTING HEAVY VIP MOVEMENT AND THE TYCOON AND HIS FAMILY WILL BE COMING TO WITNESS THE BELLRINGING CEREMONY. THE INTAGLIO -- ENTIRE IPO IS LED BY THE NEXT GENERATION, SUPPORTED BY HIS SISTER, AND BACKGROUND SUPPORT OFFERED BY THEIR BROTHER. THE HEADQUARTERS IS LIT BY THE LCD SIGNAGE, AND WE SEE A LOT OF BANKERS GETTING READY FOR THE HISTORIC MILESTONE, BELLRINGING CEREMONY. ANY TIME ARE EXPECTING TYCOON AM BANI AND THE REST OF THE FAMILY TO ENTER INTO THE NATIONAL STOCK EXCHANGE, THEY WOULD BE DOING THE BELLRINGING CEREMONY. WE COULD SEE A LOT OF CROWD THERE TO WITNESS THIS HISTORIC LISTING. THERE IS A MUSIC BAND RIGHT OUTSIDE THE NATIONAL STOCK EXCHANGE PREMISES, TO WELCOME THE HIGH PROFILE VISITORS FOR THE BELLRINGING CEREMONY AT NATIONAL STOCK EXCHANGE. DAVID: SANJAY, YOU KNOW IT'S A BIG DEAL WHEN THEY BRING IN THE LIVE MUSIC. WHAT ARE THE EXPECTATIONS FROM THE STREET? WHAT KIND OF HEADLINES ARE WE GOING TO BE WRITING AT THIS TIME TOMORROW? HOW WELL IS THE STOCK LIKELY TO DO TODAY, AND BEYOND THE FIRST DAY, WHAT ARE THE EXPECTATIONS? >> THE GRAY MARKET PREMIUM IS AROUND 22%. IF THEY COULD SUSTAIN THAT, ANALYSTS ARE EXPECTING THERE COULD BE SOME HUGE JUMPS FROM THE FIRST DAY. THEY ARE KEENLY WATCHING HOW THE STOCK WILL BE LISTED AND THE GAINS THEREAFTER. YOU COULD SEE THIS IPO TOPPING AROUND $3.2 BILLION OF SIZE AND $78 BILLION DEMAND. THEY HAVE GOT A RECORD 1.4 MILLION APPLICATION. THIS IS GOING TO BE REALLY HISTORIC, AND ANALYSTS ARE KEENLY WATCHING. THEY ARE CONCERNED ABOUT HOW THIS MOMENTUM WILL BE SUSTAINED, BECAUSE THERE WILL BE A TARIFF HIKE. ONCE THAT IS THERE, THEY WILL START MONETIZING THE 5G. NOW THEY ARE CHARGING ONLY FOR 4G. THEY WILL ROLL OUT SATELLITE SERVICES, WHICH WILL BOOST GEO PLATFORMS LIMITED. ANALYSTS ARE WAITING FOR THE NEXT STEP. THEY ARE ALL HOOKED INTO TODAY'S LISTING CEREMONY AS WELL. YVONNE: HAVE YOU DONE THIS BEFORE? I LOVE SEEING YOU IN THE FIELD. YOU HAVE TO GET YOU OUT OF THE OFFICE TO DO MORE REPORTING FOR US. REALLY SOLD IT TO ME HOW IMPORTANT AND BIG THIS IPO IS. JIO PLATFORMS, THE ONE THING TO WATCH IN THE NEXT HOUR. SUBSCRIBERS CAN TURN TO THE TERMINAL FOR MORE ON THIS. TLIV <GO> IS YOUR FUNCTION FOR THE LATEST UPDATES, COMMENTARY, AND ANALYSIS FROM EXPORT -- EXPERT EDITORS. YVONNE: TIME FOR TRENDING IN CHINA, A LOOK AT WHAT'S MAKING HEADLINES IN NATIONAL NEWSPAPERS AND SPARKING CONVERSATION ON SOCIAL MEDIA. THIS IS ONE PEOPLE ARE TALKING ABOUT. KILLIAN BOUGHT BANK HAS APOLOGIZED FOR OFFENDING CHINESE FANS WITH COMMENTS PERCEIVED INSULTING TO MAO ZEDONG. IT FOLLOWS A BACKLASH AND CHINESE BRANDS CUTTING TIES WITH THE FOOTBALL STAR. A LOOK AT STOCKS THAT HAVE ANNOUNCED THAT BREAKUP, THE LIKES OF MOON, EAST ROCK BEVERAGE. THEY FELL SUBSTANTIALLY YESTERDAY ON THE NEWS. WE CONTINUE TO SEE THESE DROP-DOWN THIS MORNING. LET'S BRING IN CHINA CORRESPONDENT MINMIN LOW. TELL US WHAT HAPPENED. >> MBAPPE GAVE AN INTERVIEW TO A FRINGE ONLINE TALK SHOW CALLED THE BRIDGE WHERE HE WAS INTERVIEWED ABOUT WHAT HIS FAVORITE ONLINE MEME OF HIMSELF THAT HE HAS SEEN, AND HE SAID THERE IS ONE WHERE HIS FACE WAS SUPERIMPOSED ON A CHINESE DICTATOR. IT MADE HIM LAUGH, HE LIKED TO SEND IT TO FRIENDS WHEN HE WAS GAMING. THE DICTATOR HE WAS REFERRING TO IS CHAIRMAN MAO ZEDONG, THE FOUNDING FATHER OF MODERN CHINA IN 1949, SO IT'S A VERY INSULTING COMMENT TO THE CHINESE. BUT THE BACKGROUND HERE IS THAT HE HAS BEEN NICKNAMED DICTATOR, SO THAT'S WHY THERE ARE MEANS OF HIM BEING SUPERIMPOSED ON HISTORICAL FIGURES, BECAUSE HE IS SEEN AS SOMEONE WHO HAS OUTSIZE INFLUENCE ON HIS CLUBS AND COACHES BECAUSE OF HOW STRONG A FOOTBALL STAR HE IS. DAVID: WELL, THE SCALE OF THE BACKLASH, ARGUABLY, IS MUCH GREATER THAN CERTAINLY THE STAR THAT HE IS, AT LEAST IN THIS PART OF THE WORLD. HELP US UNDERSTAND HOW QUICKLY THINGS ESCALATED. MINMIN: IT WAS REALLY FAST. YOU HAVE STATE TV SUSPENDING THE BROADCAST OF NOT JUST HIS MATCHES, BUT ALSO LA LIGA'S MATCHES, BECAUSE HE PLAYS FOR REAL MADRID, PART OF LA LIGA. THIS IS MUCH BIGGER THAN HIM, AND HIS SOCIAL MEDIA ACCOUNTS HAVE BEEN MUTED AS WELL. SAYING HE HAS VIOLATED COMMUNITY GUIDELINES SO YOU CAN NO LONGER FOLLOW HIM. SEVERAL BRANDS HAVE DROPPED HIM AS A BRAND AMBASSADOR, LIKE EAST ROCK. SOME FOREIGN BRANDS AS WELL. DO YOUR REPORTEDLY REMOVED SOME COMMENTS RELATED TO HIM IF, AND A SWISS SNEAKER BRAND ALSO REMOVING SOME POSTS RELATED TO HIM. FOR SOME CHINESE COMPANIES, A BIG DROP YESTERDAY YOU CAN SEE THE EFFECT OF THE CHINESE RETAIL INVESTORS' BOYCOTT. MANY COMPANIES GAVE SIMILARLY WORDED STATEMENTS SAYING THEY HAVE A ZERO-TOLERANCE APPROACH FOR ANY COMMENTS THAT HURT THE SENTIMENT OF THE CHINESE PEOPLE. THE CHINESE FOREIGN MINISTRY, OUT A SIMILAR STATEMENT, SAYING IF YOU DEFEND -- OFFEND THE CHINESE PEOPLE, YOU WILL NATURALLY BE REJECTED ACROSS SECTORS IN CHINA. YVONNE: TELL US MORE ABOUT NOW THAT HE HAS APOLOGIZED, WHAT'S BEEN THE REACTION? HAS HE BEEN ABLE TO DO ENOUGH DAMAGE CONTROL? MINMIN: FROM WHAT I CAN SEE ON CHINESE SOCIAL MEDIA, IT'S NOT BEEN ENOUGH. PEOPLE ARE NOT HAPPY WITH THE APOLOGY. THEY FELT IT WAS THE MOST BASIC THING HE COULD DO. TAKE A LOOK AT SOME OF THE WEIBO COMMENTS. SOME PEOPLE ARE SAYING, LET'S CANCEL HIM FOREVER. THE CHINESE MARKET DOESN'T CODDLE ANYONE. FROM WHAT I CAN READ ONLINE, PEOPLE ARE SAYING THE TIMING OF THE APOLOGY IS CRITICAL, THE FACT THAT HE WAITED FOR A WHILE UNTIL SOME OF THESE DEALS HAVE FALLEN OUT AND IT HAD FINANCIAL IMPLICATIONS ON HIM. THEN ONLY DID HE APOLOGIZE. PEOPLE THINK IT'S NOT ENOUGH, SO THAT'S WHY WE ARE SEEING NOT A LOT OF FORGIVING COMMENTS. THIS IS THE TRENDING HASHTAG. APOLOGIZING AFTER-THE-FACT WON'T SAVE MBAPPE. DAVID: FOREVER BLOCK MBAPPE. IT LOOKS LIKE ONE OF THE THINGS THAT WOULD GET MARKETED TO ME ON MY ALGORITHM ON TEXT ON A CAP. I WONDER WHAT THE CLUB IS DOING AND SEPARATELY, LA LIGA, WHERE REAL MADRID IS. HOW ARE THEY DEALING WITH THE FALLOUT? MINMIN: YOU CAN SEE THE STATEMENT FROM LA LIGA. THEY HAVE DISTANCED THEMSELVES FROM THE PLAYER. THEY ARE SAYING THESE COMMENTS MADE IN A PERSONAL CAPACITY DON'T REPRESENT LA LIGA. THEY DEEPLY REGRET THE OFFENSIVE COMMENTS. THEY HAVE BEEN DISTANCING THEMSELVES FROM MBAPPE'S COMMENTS. BUT WHAT'S CRITICAL IS LA LIGA IS TAKING THIS VERY SERIOUSLY, BECAUSE YOU HAVE THE PRESIDENT OF LA LIGA MEETING WITH THE CHINESE AMBASSADOR TO SPAIN YESTERDAY TO TRY TO CONTAIN THE FALLOUT, TRYING TO ENSURE THEIR PARTNERSHIP WITH CHINA MEDIA GROUP REMAINS INTACT. IT'S NOT CLEAR WHAT CHINA WOULD WANT TO SEE AND WHETHER THEY WOULD REINSTATE THE BROADCASTING OF LA LIGA MATCHES IN THE FUTURE. YVONNE: THANK YOU FOR TELLING US THAT STORY AND HOW IT'S UNFOLDED , NORTH ASIA CORRESPONDENT MINMIN LOW WHEN IT COMES TO -- WITH THE LATEST WHEN IT COMES TO MBAPPE. WE WILL TAKE A LOOK WHEN IT COMES TO EARNINGS. POP MART, SOME OF THESE CONSUMPTION NAMES BOTH REPORTING EARNINGS, SOME DID DISAPPOINT INVESTORS. WE HAVE SEEN POP MART COME OFF SOME INITIAL LOWS. DECLINES OF 3%, 4% AFTER SALES FALLING IN THE THIRD QUARTER. LABUBU, SEEMS LIKE THAT FAT IS FADING. WE ARE ALSO WATCHING PCB MAKERS RISE. DON SEAN WAS THE ONE THAT LISTED TODAY IN HONG KONG. WE ARE ALSO EXPECTING STRONG THIRD-QUARTER EARNINGS ACCORDING TO STRONG FAN. FUNDAMENTALS ARE STILL LOOKING GOOD DESPITE THE CORRECTION ON SOME STOCKS OF LATE. THEY ARE ALL UP THIS MORNING. WHEN IT COMES TO AI TRADE, LENOVO, THE CHIPMAKERS. SK HYNIX NOW 9% GAINS IN KOREA, ALONGSIDE SAMSUNG ABE .5%. WE ARE SPEAKING TO THE RBNZ GOVERNOR ANNA BREMAN LATER ON ON INSIGHT.