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Will bonds repeat their 2009 stellar performance?
- "New Normal" investment strategy (12 March 2010)

Transcription Summary

Part 1

Q: In February the U.S. Fed raised the discount rate. With the start of the exit strategy, what is PIMCO's global outlook for 2010?

2010 is the year of "exit strategies." Economic fundamentals and asset markets are less dominated by government sector.
PIMCO's "New Normal" distinguishes economic growth of emerging markets and developed markets. The reduced economic growth, regulated environment and risk will characterize the "New Normal".

Q: What would you say are the major market uncertainties in 2010?

The first risk is the link between the Chinese yuan and the US dollar.
The second major uncertainty is what will happen when the Fed completes its mortgage-backed securities (MBS) buying programs.
The third uncertainty is the change in the Fed's pre-commitment language, which is currently phrased to keep the federal funds rate exceptionally low for an "extended period."

Part 2

Q: What are the investment implications in the context of the "New Normal" for bond market in terms of duration and credit strategy?

With market expecting a rising interest in 2010 investors may consider bonds with relatively short term. Also as credit sectors have performed strongly in 2009, investors may consider bonds with high credit ratings.
Under the "New Normal", emerging market bonds may outperform their developed peers given the strong economic growth and currency appreciation.
In agency MBS, we are underweight. We view Treasury Inflation-Protected Securities (TIPS) as a strategic long-term allocation.

Q: What countries would you avoid and where should investors focus in 2010?

The most vulnerable countries are those within what Bill Gross calls "The Ring of Fire" - countries, such as Greece, Italy and UK, with the potential for public debt to exceed 90% of GDP within a few years' time, which in turn would slow GDP by 1% or more.
Risk/growth-oriental assets should be directed towards countries where:
- National debt levels are low
- Reserves are high
- Trade surpluses promise to generate additional reserves for years to come
- Economy is savings-oriented and consumer-focused

Some of the information contained herein, including any expression of opinion or forecast, has been obtained from or is based on sources believed by Allianz Global Investors to be accurate and reliable. The information is given on the understanding that any person who acts upon it or otherwise changes his or her position in reliance thereon does so entirely at his or her own risk without liability on our part. This is not an offer to buy or sell or a solicitation or incitement of offer to buy or sell securities, if any, referred to herein. Investment involves risks, in particular, risks associated with investment in emerging and less developed markets. For further fund details including the risk factors, please refer to the offering document. This material has not been reviewed by the Securities and Futures Commission.

Speaker Biography

Bruno Lee

Regional Head of Wealth Management
Personal Financial Services, Asia-Pacific
The Hongkong and Shanghai Banking Corporation Limited

Bruno Lee is HSBC's Regional Head of Wealth Management, Personal Financial Services, Asia-Pacific. He has overall responsibility for developing and implementing product strategies and propositions for all wealth management products and services including deposits, investment and insurance, in the Asia-Pacific region.

Lawrence Tse

Chief Marketing Officer, Allianz Global Investors Hong Kong Limited

Mr Lawrence Tse is Chief Marketing Officer of Allianz Global Investors Hong Kong Limited, responsible for business development and client servicing functions. He also plays an active role in regional retail business initiatives as well as product innovation. Mr Tse started his career in the asset management industry in 1997, and joined Allianz Global Investors in March 2008.

Risk Disclosure / Disclaimers

This video is not intended to provide investment advice and does not constitute a solicitation for the making of any deposit or investment product.
The Hongkong and Shanghai Banking Corporation Limited ( the "Bank") neither endorses nor is responsible for the accuracy or reliability of, and under no circumstances will the Bank be liable for any loss or damage caused by reliance on, any opinion, advice or statement made in this video.
The opinions expressed are those of the featured speakers, and except where a speaker is specifically identified as a representative of the Bank, do not represent the Bank's views. The opinions are subject to change without notice and should not be construed as a recommendation of any individual holdings or market sectors.
Investment involves risk, value of investment may move up or down, and may become valueless. Past performance figures shown are not indicative of future performance. The information contained in this video has not been reviewed in the light of your personal financial circumstances. Reliance upon the information is at your sole discretion. You should carefully consider whether any investment products are appropriate in view of your investment experience, objectives, financial resources and relevant circumstances. The relevant product offering documents should be read for further details.
The investment decision is yours but you should not invest in the products unless the intermediary who sells it to you has explained to you that the product is suitable for you having regard to your financial situation, investment experience and investment objectives.
This video has not been reviewed by the Securities and Futures Commission of Hong Kong or any regulatory authority in Hong Kong.

Can China keep Goldilocks economy on track?
- Views from HSBC's Chief China Economist Qu Hongbin (26 February 2010)

Transcription Summary

Part 1

Q: China has achieved its 8% target growth in 2009. What is your view for China economic growth in 2010?

We are positive on China economic growth in 2010. We believed China's V-shape recovery will continue with the support of strong domestic consumption and improving export markets.
We expect economic growth for this year can be as high as 9.5%.

Q: China's Consumer Price Index (CPI), a gauge of inflation, has turned to positive since November. Do you think inflation will come back to force?

The inflation pressure is picking up with rival economic activities.
The rise in CPI is driven by food price and improving labor markets which implies the pressure of wages acceleration.
If China's GDP grows within 10%, our CPI forecast at 3% seems reasonable. We expect Chinese government will take steps to curb a rapid CPI spike and keep inflation under control.

Part 2

Q: The People's Bank of China (PBoC) has increased reserve requirement ratio this year. What is the impact on interest rate and currency?

It is necessary for Chinese government to commence tightening policies as strengthened economic data have brought concerns about overheating economy and potential inflation risk driven partly by accelerating loan lending.
Quantitative tools such as reserve requirement ratio and window guidance to lending will likely be main options this year.
Interest rate hike probably will come as early as 2Q. However, record low interest rate in US might constrain the magnitude of interest rate hike in China.
With improving export markets and potential inflation risk, we expect a moderate RMB appreciation.

Q: Chinese government has continually encouraged domestic consumption. What sectors will be the main driver for economic growth this year?

With Chinese governments limiting new loan growth, new infrastructure projects development is expected to slow down.
Domestic consumption in terms rural and urban will still be the key driver to boost economic growth.

Speaker Biography

Bruno Lee

Regional Head of Wealth Management
Personal Financial Services, Asia-Pacific
The Hongkong and Shanghai Banking Corporation Limited

Qu Hongbin

Chief Economist, China, Global Research, HSBC Global Banking and Markets

Qu Hongbin is HSBC's Chief China Economist. He has been at HSBC since 2002, and has worked in the financial markets for 17 years. Previously Hongbin also worked at Bank of China and other Chinese institutions. He is a regular economics commentator on television and radio, and his views are often quoted by Wall Street Journal, Reuters, Financial Times, Shanghai Securities Daily and other well-known domestic and international media.

Hongbin holds a postgraduate degree in Economics from University of Glasgow in UK and a Bachelor degree in Engineering from Northwestern University of China.

Risk Disclosure / Disclaimers

This video is not intended to provide investment advice and does not constitute a solicitation for the making of any deposit or investment product.
The Hongkong and Shanghai Banking Corporation Limited ( the "Bank") neither endorses nor is responsible for the accuracy or reliability of, and under no circumstances will the Bank be liable for any loss or damage caused by reliance on, any opinion, advice or statement made in this video.
The opinions expressed are those of the featured speakers, and except where a speaker is specifically identified as a representative of the Bank, do not represent the Bank's views. The opinions are subject to change without notice and should not be construed as a recommendation of any individual holdings or market sectors.
Investment involves risk, value of investment may move up or down, and may become valueless. Past performance figures shown are not indicative of future performance. The information contained in this video has not been reviewed in the light of your personal financial circumstances. Reliance upon the information is at your sole discretion. You should carefully consider whether any investment products are appropriate in view of your investment experience, objectives, financial resources and relevant circumstances. The relevant product offering documents should be read for further details.
The investment decision is yours but you should not invest in the products unless the intermediary who sells it to you has explained to you that the product is suitable for you having regard to your financial situation, investment experience and investment objectives.
This video has not been reviewed by the Securities and Futures Commission of Hong Kong or any regulatory authority in Hong Kong.

A tricky but promising 2010 (12 February 2010)

Transcription Summary

Part 1

Q: We have seen strong rebound in global equity markets especially emerging markets in 2009. What is your outlook for global equity market in 2010?

I am still positive on equity markets. However, the second year of a bull market is never as easy as the first. Given the global equity market has risen by around 30% in 2009, we expect global markets to rise about 15% this year.
Same situation can be seen in Asia. It is hard to see how Asia can grow much more strongly this year given pricey valuations.
Normally equity market moves ahead of the economy. Investors could consider allocating equities in their portfolio in 2010 but should not expect significant return that saw in 2009.

Q: Some developed markets economies have been improving. Among developed markets, which market do you think can provide good investment opportunities?

On a 3-5 year view, emerging markets such as China and India still look attractive with structural growth stronger than developed markets such as the US.
But for this year, the chance for upside potential in the US market is higher than that in Asia due to improving employment conditions, relatively cheap valuations and better-than-expected corporate earnings.
The rate hikes to cool the economy down in Asia may be negative to the market in the short term.

Part 2

Q: Turning to Asia especially China, what is your view on equity markets?

We are quite optimistic about Chinese market. However, strong economic data in China has raised concern over tightening monetary policies to cool the economy down.
The first tightening in a cycle is typically negative for equity markets and correction might continue for a while, but H shares are attractive on a one-year view

Q: Chinese government pumped money to infrastructure projects and encouraged domestic consumption in 2009. What is your sector view this year?

Consumption is the long tem theme in China over the long run. We prefer Chinese consumer companies with strong business in the second/third tier cities as well as some oversea companies which can benefit from China's consumption growth and have attractive valuations.
Export sector will be our focus too. The recovery in export markets in the US and even some parts of Europe is better-than-expected. Asian exporters are expected to benefit from that.
For banking sector, Chinese banks have been under pressure in the past few months as worries over tightening monetary policies as well as capital raising concerns. However, Chinese financial industry is expected to continue to grow.

Speaker Biography

Bruno Lee

Regional Head of Wealth Management
Personal Financial Services, Asia-Pacific
The Hongkong and Shanghai Banking Corporation Limited

Garry Evans

Global Head of Strategy, Global Research, HSBC Global Banking and Markets

Garry heads HSBC's equity strategy team worldwide. His previous roles at HSBC include Asia Pacific Equity Strategist, Head of Pan-Asian Equity Research, and Japan Strategist. Garry began his career as a financial journalist and was editor of Euromoney magazine for eight years before joining HSBC in Tokyo in 1998. Garry is based in Hong Kong.

Risk Disclosure / Disclaimers

Some structured products are not principal protected and you could lose all of your investment.
The maximum return on termination of some structured products is limited to the nominal amount.
Some structured products are not secured on any of our assets or any collateral.
Buying an Equity Linked Structured Product is not the same as buying the underlying asset. They are designed to be held to their expiry date. For Equity Linked Structured Products, if you try to sell them before expiry you may not be able to find a buyer. If you would like to find out an indication of the current market value of your Equity Linked Structured Products, you should contact your distributor.
Equity Linked Structured Products are not listed on any stock exchange and are not covered by the Investor Compensation Fund
This video is not intended to provide investment advice and does not constitute a solicitation for the making of any deposit or investment product.
The Hongkong and Shanghai Banking Corporation Limited ( the "Bank") neither endorses nor is responsible for the accuracy or reliability of, and under no circumstances will the Bank be liable for any loss or damage caused by reliance on, any opinion, advice or statement made in this video.
The opinions expressed are those of the featured speakers, and except where a speaker is specifically identified as a representative of the Bank, do not represent the Bank's views. The opinions are subject to change without notice and should not be construed as a recommendation of any individual holdings or market sectors.
Investment involves risk, value of investment may move up or down, and may become valueless. Past performance figures shown are not indicative of future performance. The information contained in this video has not been reviewed in the light of your personal financial circumstances. Reliance upon the information is at your sole discretion. You should carefully consider whether any investment products are appropriate in view of your investment experience, objectives, financial resources and relevant circumstances. The relevant product offering documents should be read for further details.
The investment decision is yours but you should not invest in the products unless the intermediary who sells it to you has explained to you that the product is suitable for you having regard to your financial situation, investment experience and investment objectives.
This video has not been reviewed by the Securities and Futures Commission of Hong Kong or any regulatory authority in Hong Kong.

2010 Investment Outlook
Views from HKD peg designer John Greenwood (29 January 2010)

Transcription Summary

Part 1

Q: We are seeing some recovery signals in global economy starting from the second half of 2009. What is your view for 2010?

Global recoveries that started in second half of 2009 in western developed economies will continue in 2010.
However, the recoveries were fragile, limited and dependent on government support. There is no fully private sector-driven recovery yet. One of the reasons is that liquidity is not reaching private borrowers, thus making liquidity limited.
There is net repayment of debt while banks are reluctant to lend and borrowers are unwilling to extend their indebtedness. Spending in new project is inevitably limited, which means that consumer spending will be slower than past recoveries.
For these reasons I am projecting only moderate rates of economic growth with continued low inflation in 2010.

Q: Given global economies will have moderate economic growth and low inflation, what is your view on China in particular?

The position here is very different.
After the Asia financial crisis in 1997, Asian economies paid down debt in 1998 to 2004 and have not been burdened with debt as they were in 1997-98, and therefore monetary and fiscal policies have been able to gain traction more promptly such as China.
Asian economies are able to spend more on domestic activities. The growth in the region is not going to be export-led, instead, the component of growth will shift towards domestic-led growth, like consumer spending and infrastructure.

Part 2

Q: We have seen the weakening of US dollar last year. What is your view on US dollar in 2010?

As long as interest rates remain low in the US and the UK, we are likely to continue to see weakness in US dollar and sterling.
However, when markets start to anticipate the Fed to raise rates, then we may expect some strengthening of the dollar because that will be the case we start to expect the carry trade to unwind.
My expectation is US dollar will continue to be weak at least for the first half of 2010 primarily due to the carry trades, but later in the year as growth improves and there are prospects on interest rate hikes, then the dollar should strengthen.

Q: In terms of financial markets, i.e. equity and bond markets, what's your view for 2010?

Although economic recovery will be rather subdued and slow in the developed markets in 2010, the recovery of profits can be much stronger in 2010, so I am quite optimistic about the equity market outlook.
On the bond side, as inflation is a major factor on bond market and inflation will continue to be very low, I remain reasonably optimistic about the bond market outlook. However we should not expect such stellar return in 2010 that we saw in 2009 especially for corporate bonds and high yield bonds.
The gains of government bond should be rather limited this year as inflation and interest rate hikes expectation are factors that will come against government bonds, but I think we still have opportunities in the corporate areas and the high-yields.
Equity and bond markets tend to do very well in the early stages of business cycle upswings. We are just come out of recession so we have a long way to go in terms of policy changes which may threaten the economic outlook. So I think investors can maintain a risk-oriented portfolio holding some quantities of both equities and high yield bonds for 2010.

Speaker Biography

Bruno Lee

Regional Head of Wealth Management
Personal Financial Services, Asia-Pacific
The Hongkong and Shanghai Banking Corporation Limited

John Greenwood, OBE

Group Chief Economist, INVESCO plc

John Greenwood OBE is Chief Economist of INVESCO plc, which includes INVESCO, AIM and other distribution brands. A graduate of Edinburgh University, he did economic research at Tokyo University and was a visiting research fellow at the Bank of Japan (1970-74). From 1974 he was Chief Economist with GT Management plc, based initially in Hong Kong and later in San Francisco. As editor of Asian Monetary Monitor he proposed a currency board scheme for stabilizing the Hong Kong dollar in 1983 that is still in operation today.

Mr. Greenwood was a director of the Hong Kong Futures Exchange Clearing Corporation (1987-91) and council member of the Stock Exchange of Hong Kong (1992-93). An economic adviser to the Hong Kong Government (1992-93), he has been a member of the Committee on Currency Board Operations of the Hong Kong Monetary Authority since 1998. He is also a member of the Shadow Monetary Policy Committee in England. Mr. Greenwood is a director of INVESCO Hong Kong Ltd, INVESCO Asset Management Singapore Ltd, and the Hong Kong Association in London.

Risk Disclosure / Disclaimers

This video is not intended to provide investment advice and does not constitute a solicitation for the making of any deposit or investment product.
The Hongkong and Shanghai Banking Corporation Limited ( the "Bank") neither endorses nor is responsible for the accuracy or reliability of, and under no circumstances will the Bank be liable for any loss or damage caused by reliance on, any opinion, advice or statement made in this video.
The opinions expressed are those of the featured speakers, and except where a speaker is specifically identified as a representative of the Bank, do not represent the Bank's views. The opinions are subject to change without notice and should not be construed as a recommendation of any individual holdings or market sectors.
Investment involves risk, value of investment may move up or down, and may become valueless. Past performance figures shown are not indicative of future performance. The information contained in this video has not been reviewed in the light of your personal financial circumstances. Reliance upon the information is at your sole discretion. You should carefully consider whether any investment products are appropriate in view of your investment experience, objectives, financial resources and relevant circumstances. The relevant product offering documents should be read for further details.
The investment decision is yours but you should not invest in the products unless the intermediary who sells it to you has explained to you that the product is suitable for you having regard to your financial situation, investment experience and investment objectives.
This video has not been reviewed by the Securities and Futures Commission of Hong Kong or any regulatory authority in Hong Kong.

Will bonds repeat their 2009 stellar performance? - "New Normal" investment strategy (12 March 2010)

Transcription Summary

Part 1

Part 2

Speaker Biography

Can China keep Goldilocks economy on track? - Views from HSBC's Chief China Economist Qu Hongbin (26 February 2010)

Transcription Summary

Part 1

Part 2

Speaker Biography

A tricky but promising 2010 (12 February 2010)

Transcription Summary

Part 1

Part 2

Speaker Biography

2010 Investment OutlookViews from HKD peg designer John Greenwood (29 January 2010)

Transcription Summary

Part 1

Part 2

Speaker Biography

Will bonds repeat their 2009 stellar performance?
- "New Normal" investment strategy (12 March 2010)

Can China keep Goldilocks economy on track?
- Views from HSBC's Chief China Economist Qu Hongbin (26 February 2010)

2010 Investment Outlook
Views from HKD peg designer John Greenwood (29 January 2010)