9. 9 billion so far has been used. Talking about the Market Street in hong kong and elsewhere in the asiapacific. John woods joins us in a few minutes to talk about how to adjust your portfolio. Equities still the place to be, but there are perhaps more tweaks needed. Angie joining us is the former the wto herest for in hong kong. It will be interesting to get tradeoughts as to how will possibly stimulate these moves in the equity space. Lets take a look at the market. Blackrock saying the potential for asian stocks to move higher is there. Gmm is the function on your terminal. Here is a trading halt to tell you about. Is notpaint participating in this rally we are seeing today because of a m a. Ion on it could be possible affirmation of a bid. Check out what is happening, hong kong above 30,000. We are waiting to see whether or that recordbreach setback in october 30, 2007. That is definitely the first time we are seeing it above that 30,000 mark in a decade. Other notables of course the kospi, and the korean won, what that is doing to the currency, meaning it is going gangbusters here, jumping to its highest level in more than two years. Let me show you what is going on here. It is passing the support level. Hasre seeing that the won been one of the best performers this year, that and the thai baht. Lets get into 568. Take a look at korean won. The Technical Analysis fibonacci, the support level bouncing around that, but with the support level of 1100, it does show that it has room to move higher, and in fact according to an fx trader referring to activity in the offshore market, investors are buying the won without questioning. We are seeing Technical Support for the thai baht. 615. Is thai baht is the other big performer in the asian currency space this year. It is nearing that 50 you comparelevel if it to its slide from april 2013 to october 2015 lows. Bouncing around that 50 fibonacci retracement. That is also a bullish signal. That is what is happening in the markets today. Might become ait problem at some point for thailand which is a very export dependent economy. Lets get over to singapore for first word news. Haslinda uber being sued for itligence after revealing paid hackers to keep her breach secret. It compromise the names and email addresses and phone numbers of 50 million customers and licenses of 7 million riders. Andchief Security Officer one of his deputies this week were fired for their roles in concealing the hack. Symbol oblique enters the unknown after losing the only leader the country has ever known as Robert Mugabe resigned as president. He was the worlds oldest head of state and had ruled zimbabwe since independence from britain 37 years ago. Undert after eating place house arrest and fired by his own party. Says whilen inflation should move up in the next year or so, it is not certain the current low environment is transitory. New yorkan audience at university that the fed is reasonably close to goals, but tightening too fast could strand inflation below 2 . She had some advice for her successor. Importantthe most things i learned as chair and thought it important to pass on his to keep an open mind. Not to simply assume history is repeating itself. Haslinda reports from berlin say chancellor Angela Merkel is looking for another grand coalition with the spd that two of her three terms as chancellor. The spd leadership is wary of going back. Global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. Angie in hong kong, the benchmark index has hit a level not seen for 10 years, the hang seng above 30,000 has tencent extended its rally and chinese financials climbed. For more, mark cranfield. Also notable is ping an insurance. Its performance compared to tencent, they look and the neck. Looking and neck. Look no and neck. The pboc is doing the right things in managing the Monetary Policy come and we have the congress out of the way, so it is blue skies ahead for china and people want to get involved. The participation in turns of volumes, as you are mentioning earlier, the connect between hong kong between shanghai and shenzhen volumes are picking up. Retail investors in the Hong Kong Market as well. Everything is pointing to people wanting to get on with this china story, tech companies, insurance companies, it is across the board. David every time we get moves like this and everyone fills feels giddy, it makes one wonder whether are not the market is getting ahead of itself. What is the conversation within your team on the risk rally right now and whether it is getting overheated shortterm question mark shortterm . There is always a chance it gets over done in the shortterm and we have seen a few corrections this year. We were discussing the yield curve this morning, people looking at the flattening of the yield curve, the flattest it has been for several years, but still has a long way to go. Typically u. S. Recessions occur curve the time that the goes negative, and it is still a long way before the u. S. Curve yes, it is ay, so sign that maybe we are getting towards in game, that the in game can take a long time to play out, so we could be looking at months, may be more than a year, before we get to a negative yield curve. During that time, it is quite good for equity markets. Angie in the fx pace with a weak u. S. Dollar supporting the won and thai baht, these are two export driven nations. That cant be a good feeling for south korean officials taking a look at their export business and going, well, a stronger won might crimp demand here. Its true. Game. A relative if you look at the performance but all asianwon, currencies are relatively strong. The issues for korea in particular would be if the currency gets to strong against the japanese yen and to strong against the chinese won. More so than the u. S. Dollar. If people look at where they are historically against other asian currencies, it will give you a good idea about how far it has gone. Waye is probably still some to go, but you can expect that authorities in korea and other countries will probably become a bit more regular in the way they get their message that their currencies are becoming uncomfortable in relation to their export markets. Thank you so much for coming on the program out of singapore. More on this story and all the undertones across trading in our markets live blog at mliv. You can get a market run down in one click with commentary analysis from expert editors. Hour, still ahead this will 2018 get off to a flying start for China Southern . We will get the outlook in our exclusive interview with the carriers vice chairman. David can the rally really last . Hear from Credit Suisse in just a moment. Stay with us. This is bloomberg. David this is Bloomberg Markets asia. Angie lets get you a quick check of the business flash headlines. Several chinese lenders plunging after reports that the country will hold approvals for micro companies. Withfell as much as 20 others dropping. Due tohtening policy is risky cash loans and raising concern that lenders could be subject to for the restrictions. Record 51 has a million and products linked to lehman brothers. Fended have its licenses as penalty for failures of internal controls and sales practices over sales and products before the 2008 bankruptcy. Jp morgan failed to do background screenings on 95 of nonregistered employees for more than eight years. The Regulatory Authority says up until may this year, four people wouldrked in the unit have otherwise been disqualified because of criminal convictions. Speaking of conviction, what is your conviction when it comes to this rally . David john woods is here, he is from Credit Suisse. You look at hong kong and the amount of money from china, the names getting picked up, it feels a lot like the first half of 2015 and we know what happened in june. Help me feel secure. I think if there is a contrary and bone in your body, you would be shaking right now. And the underpinning of this rally is based on growth and earnings. These are important drivers. The technical aspect you highlighted is absolutely right. In the third quarters this year, we saw outflows from asian 9 billion, order to date, we have seen inflows of 2 billion. Earnings are improving. Were expecting earnings this ,ear up 15 to 20 this year similar to next year. In that environment with growth and exportdriven growth particularly rebounding, it is hard to be bearish. People aret that just moving money around the board here, causing yield curves in the u. S. To flatten . A lot of people say this will hit the real economy. I think the yield curve story is probably more to do with the relatives i you of u. S. Rates than say japanese, british, or european. As yields are more attractive than other core Government Bond yields in developed markets come and almost naturally that attracts an awful lot of flow into the back end of the curve which is causing this flattening i. Are talking about it dont think the flattening is a reflection of risky Economic Conditions as ive flattening you curve normally would be. Icksicularly as it t towards the 0 mark. It was just below 1 this morning. On the liquidity side, there is liquidity seeking growth and earnings coming towards emerging markets in general and asia in particular, largely on the earnings story. I dont think that will end any time soon. The u. S. Is also a growth and earnings story and we have seen corporates revising higher guidance for next year, which is a positive relative story, but asian looks particularly attractive given that it has underperformed develop market since 2011. On a valuation based come markets here are looking quite attractive. A the socalled em joke. No one got it. Southeast asia reemerged as a growth story. Malaysia, philippines, so in and so forth. When does that show up and earnings . I think they are beginning to show up. The market itself got somewhat ahead of itself, asian markets in general, 30 of 40 in the case of china 50 . Multiple expansion rather than earningsdriven expansion. The market was anticipating these markets going higher in the course ahead, and that is now happening. Expecting aessarily huge amount of price appreciation given the market was expecting this and anticipating these earnings coming through come up and in general, this is a positive earnings story and a good growth story. One final point as well, globally inflation is looking pretty benign. This suggests that Central Banks will maintain attractive liquidity conditions going forward, and i think this is generally supportive. Angie hi dont hear any contrary and bone i dont hear any contrary and bone contrarian bone here. If you take money off the table, 2018u risk losing more and or are you potential the smartest guy in the room . I am certainly not the smartest guy in the room, but i chinasuggest the market has given us returns of close to 50 . We are advising clients to become more selective. You cannot just buy in etf or index. Angie why . We are focusing on the banks. They have then under loved, but yet pay at an attractive dividend. Pricetobook of values is really quite high on the back of this improved economic outlook. If that were to happen, you would see a nice upswing in price performance. Way we are managing and trying to adjust contrary and bones, buying more selective. Being a little discriminatory and more selective. We want to tap into more. 20 more ahead with john woods Credit Suisse. This is bloomberg. Angie this is Bloomberg Markets asia. I am angie lau. Thed right, lets continue conversation with john woods, cio Credit Suisse asiapacific. Tencent and alibaba, the weightings of those two stocks, 10 . Problem for backers because they cant allocate more than 10 . Are lucky they contract the funds as closely as they can come a but is that another reason to get out of index funds right now that involve these two stocks . It is a good question. The answer can be complicated, but when you tend to see a migration or regime change from a market which is simply driven in the expectation that the index will lift all ships, to a market that becomes more discriminatory, where individual securities tend to have a greater influence than simply an etfdriven exercise. That is an important decision to make. I think next year will become a lot more discreet in terms of successful trades. I think we will look at sectors, subsectors, an individual companies more than this year. You tend to see in these environments volatility rising. You tend to see individual stocks outperforming. Market optimum space rather than just being in a market where a rising tide lifts all ships. Next year it will be much more important in that area. Angie are there easy wins for 2018 . Either easy losers to avoid . Thinkk, if we were to that the fundamental drivers of growth and broad earnings were to change next year, absolutely there would be some discrimination we need to make, but if week if we get the sense that this year will be next year will be similar to this year, low inflation, reasonably lowng, moderate growth, inflation, then it would be hard to make a call. Talking to isare rotation. Do expect to see meaningful rotation from one sector or space into another. Typically that is a valuedriven is betterhen there value elsewhere and there is that rotation, but the i. T. Space is rich and likely to get richer in the coming year. Angie same with bitcoin apparently. What you think of bitcoin . Possibly somewhat Jurassic Park good it is an accident waiting to happen. Angie what do you get asked about this . David we are in a client meeting almost every time and there is a morbid fascination akin to a car crash. Accident waiting to happen in the Virtual Currency space, not necessarily bitcoin. Is Block Chain Technology the one that will move on to the next level. Angie which are saying is in terms of the gold rush, the winners were the ones who sold the shovels. Thats not what they show you in hollywood movies, john. Of course we are dealing in reality. Thank you for that insight. You will probably still be asked about bitcoin at every meeting. Almost every. Angie thank you so much for that. And that is john woods, cio of Credit Suisse asiapacific. You can catch up with all of our interviews today using our interactive function tv. And getatch us live into the charts, securities, and bloomberg functions we bring up on our show. For the wtoonomist joins us later life. If you have any questions for him, send it to us and we will try to get that into the conversation. This is for bloomberg subscribers only. Check it out at tv. Stay with us. This is bloomberg. David you are watching Bloomberg Markets asia. Heady days ahead david a lot of these guys are in precarious situations. You are faced with clients used to 20 returns. You have to temper those expectations but as good as we are we are not likely going to turn out the same kind of returns. A price chart. It is a percentage return. 20 and we have a month ago. This hides the fact that you have underperformers. When you go to 2018, it makes you think, what is normal . When you look at the past 50 years, a good equity year is eight to 12 . Lets not forget that the year started with talk of federal Interest Rate hikes, and concern that with the more expensive dollar, that will deplete liquidity from the intot as we hear qe turn qt all around the world. But we didnt get that from the boj and even the ecb is still being pressed to talk about eventually when it is going to broaden that qt strategy. The party continues. It doesnt end at midnight. Following all the market moves ahead of the lunch break. Dont turn into pumpkins just yet. It is not totally to jump in with earnings. Interestingly we have blackrock turning the i. T. Space and stretch really wish ands while there are overweight chineses box stocks. Tokyo shares are rising for the second day. Mark continuing to rise. Retail investors pile in along with institutional payer players. About 50 points shy of the alltime high. Amid this appetite for risk, look at the currencies space, rate hike won has a next week. The question will be if we hear more hawkish tones from officials. Dollar has moved from beyond 30 for the First Time Since september 8 while the exit can peso is slipping. The aussie just cant catch a break. Yen, that is rising for a second day after yellen warned against rapid rate hikes. This shows you the rise we have been seeing in the twoyear treasury yield. Elevatedhave these levels. At the movers in asia today. On Solid Earnings in hong kong. U. S. Arrier foresees more reach in its future. Quite a bit moving today. Lets get to the first word news. Former internet regulator is the First Official investigated for corruption since the communist Party Congress lost last month. Beijing agency says corruption crackdown on corruption will not relent. Robert lighthizer said there is no evidence that canada and mexico will seriously engage on renegotiating nafta. Light heisers Robert Lighthizers statement says talks fell short of completing any section. Claims progress on ecommerce and says some rounds of talks may be close before the next round. Brexit canurope that only be passed if they agree to stop discussing a new trade deal. Ava davis said it wont be possible to address the border between Northern Ireland and the republic or to finalize the divorce still until the terms of future trade relations are more clear. Clear thatit is also brexit may happen without a deal. It is possible, not probable that we dont get a deal. Saudi arabia cut all shipments, the lowest since 2011 in september, but boosted 6. 5ned products in a record Million Barrels of crude today. Oil exports while keeping to the spirit of the agreement. Global news to weigh four hours a day powered by more than 2700 journalists and analysts in more than 120 countries. Were watching the Airline Stocks here. Look at this, air china is back to the