China out prices in in half an hour. 4898, it tells you what has been going on since 2006. The white line indicates firsttier city performance. We have had this massive runup in june 2015. Ever since, we have seen this fall back. It has been muted for secondtier and third tear cities. We have early data from china real estate showing a sharp rebound in tier one cities and tier three cities. Is the result of strict controls during the october Party Congress unwinding, so the possibility of a turnaround. All will be revealed after xi jinping said houses are for living in, not for speculation. The lastding day of week in this part of the world, singapore, taiwan, and malaysia kicking things off. Sophie the countdown to christmas, risk on for markets with the u. S. Tax bill passage looking likely. We have the Malaysian Ringgit and the won leading declines against the dollar, and the yen looking to test 113. We have u. S. Key Economic Data deck this week. Shares mostly climbing. The kospi looking little change. Shares in singapore up on better than expected exports. Requesting a trading a majoritytakes stake in another brewer. Rising, japanese trade figures to digest, 12 straight months of yearly growth in exports for japan, so that recovery kicking on. Rishaad japan export recovery fueling corporate profits, but nomura expecting growth to slow down next year. What is the thinking behind all of that sophie . Sophie the risk factors are u. S. Policy tightening, normalization of boj policy, but longterm expansion in Japanese Corporate earnings looking to remain intact. 18002000forecasting range for the topix. This morning, financials and materials are leading the topix higher with toyota, sony among the biggest contributors. You have Construction Companies among the biggest drags on the topix. One sliding over 4 . Its headquartersuction did conm was searched by prosecutors amid a probe into antimonopoly violations. Some movers in sydney. One jumping the most on record after oracle agreed to buy the company and a cash deal for 1. 2 billion. Zon slipping after it rejected a draft decision. Those are some micro moves. We also have chinese property prices on deck. Rishaad should be there in 25 minutes. Thank you. News of an election in south america, lets find out more. Sebastian pinera is said to win the president ial chile. N in his 55 would be a relief for the Business World after four years of the most radical reforms in decades under the previous president. Failure to take command in the first round lead to a market selloff. The vote for the president ial candidate for the African National congress has been delayed a second time with almost 10 of Party Delegates being excluded. There are only two people left deputyrace, then president and jacob zumas exwife. The Bitter Campaign has divided the anc. Turnbull has regained his one seat majority in parliament after a former tennis star won an election in sydney. Swingting saw a 5 against the liberal coalition that would see it defeated if replicated across the country in the general election. A poll Shows Government trading the labour party by six points. Foreigns biggest investor is buying more treasuries. Holdings of u. S. Debt rose a . 4 billion in october 2 almost 1. 2 trillion. Beijing is building currency reserves amid capital controls. Japan fell for the Third Straight month. The two countries account for more than one third Foreign Ownership of treasury. Global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. Rishaad looking at the Hong Kong Exchange. Proposing to let Innovative Companies list with a dual class share structures. We have more on this. This has been hugely controversial. What does the Hong Kong Exchange hope to achieve here . Ipos goingseen big around the world, shopping for the best conditions on which they want to list, so hong kong in the last 1015 years has lost out on some of the biggest Chinese Tech Companies to new york. Rishaad tell me the advantages with a dual class share structure. This allows founders of companies to maintain control while holding a minority of shares because they have a special weighting. Popular with Technology Stocks where founders are innovators and bring to the table more than just money. Rishaad the question is what do we know about these proposed changes . There will be i round of consultations and regulatory emphasis is on allowing Innovative Companies who applied for dual class share structure it is not a guarantee they will get dual class share structure. There are subjective tests the applicants will be put to, and the shares themselves would only be held by directors. If the director were to leave the firm, the special boating class of share would no longer apply, so there are limitations to how the shares would work. Rishaad what needs to happen now . What happens with these proposals as the Securities Commission looks at it closely . Is there sign off on this, or is it a done deal . I dont rank we would have think we would have gotten that far if the Security Commission was opposed to it. In government has weighed its support for the change and having a dual class share structure and be more as a Financial Services center. The regulators have given their blessing. There will be another round that will happen in the First Quarter of next year. Once that process is complete within the first half of next expect to we can happen see this go into force and we will have our first applicants and listings of companies under a dual class share structure. Rishaad thank you very much indeed for that. Headlines coming through from the austrian treasurer, speaking, Scott Morrison, talking about the budget. Australia zynga deficit of 23. 6 billion australian dollars 20162017, much less than the estimates of 29. 4 billion. Seeing a return to surplus in three years, 2021. Inflation 2 next year. That is in line. 2. 5 growth for the year ahead, this year i should say, versus what he five basis points, 2. 5 percent, which is the estimate in may. The economist had been looking at the deficit of 25. 7, so they are seeing it slightly narrower than that. Looking ahead, some predicting a bobby ryan for china next year. We have the news from bnp paribas with the reaction and latest house prices. Coming up next, our guest speaks about why he is advising caution if you want to invest in the u. S. Markets. This is bloomberg. Equities having quite a yen, generalker economic recovery, helping to stoke earnings or the other way around. Lets see if he can keep going with our next guest. Gg before the chicken, corporate profits, nominal gdp doing well. Tell as white numerous things this will go in the other direction and we will see corporate profits under pressure in 2018 . All their know arguments, but i can see a case where people have said we have had a strong run in japan, corporate profits more than doubled. They were globally good, particularly strong in japan. That sort of pace you wont see. Bethat sense a slowdown with the prudent thing to forecast since it is hard to underpriced relative to how it is performing as an economy, i dont think that is a bad thing for the stock markets. Rishaad the corporates have money on their balance sheets, do they not . Does that translate into wages . Is that the root of inflation the boj wants . Is more of assue political question in the case of japan because it is one of the things the Prime Minister desperately wants from a political perspective. Inflation for most japanese voters, and that is what matters, is not clear whether it is a good thing or bad thing. Rishaad they do want more money in their pockets, dont they . Its one thing to increase understanding or abenomics, not to talk about inflation, but wage increases, but there will number,slightly bigger but i dont think that is the main story in japan. There will be modest wage increases Going Forward. There will be a political noise trying to put emphasis and Pressure Companies or shame them into raising wages. It will happen to some extent, but that is not what matters. What matters is they get the right Monetary Policy mix. Rishaad do they not have it now . They are too tight for my taste. Rishaad the bank of japan . That is why we are missing the inflation target. Rishaad how did we become looser here . Let me finish. They could become looser, and personally they should steepen if they choose the tool of yield curve control, then they should steepen the curve. My preferencethey would do it by lowering the short and deeper into negative territory, which sounds experimental in japan, but economies like sweden, switzerland, denmark have done it, and they have done more. That would have been more appropriate. Where we are now, it does not matter much because japan is lucky to have a global cyclical recovery going on them a so without the boj doing anything come of conditions ease automatically. If this global momentum goes away, and eventually it will, the pressure will be for them to keep easing or ease further if they are serious about meeting their 2 overshoot target. Remember it is an overshoot target and they are too far away. Rishaad build the yield curve and they will calm . So far they are just sitting on their hands. Rishaad you mentioned what is important Monetary Policy wise, but what has been important and abenomics has been the weakness in the yen. We have seen stocks going up, but that correlation has broken down. That is a good thing . That is a good thing. Yen, but not was an important element, but tight,ther policy was easy, or too tight, and that is another point in what we discussed earlier. The yen has been strong for a while, and there you see the tightness of the policy. Now it is getting softer, but that is more of a global thing. Rishaad im not going to drill too much on european equities, but caution for u. S. Equities. Why . The u. S. Is the most expensive. There is nothing wrong with the , the direction is positive, but other markets like japan and europe are more attractive in relative terms. We maintain a tiny overweight in the u. S. , but have shifted recently and remain slightly more favoring japan and europe in particular. Rishaad there has been this move towards defensive come out of growth towards value growth, value being left behind. This does smack of late cycle equity trading, does it not . I believe so. We will see if it is there to stay, but that is what has been happening recently. There are other signs that are bullish, but still late cycle. For example, the mania, cryptocurrencies, bitcoin, signs of exuberance, and you have it in other areas. We think that is a cautionary tale, but we prefer to build up some cash reserves because we do think the market is due for a strong run and we could see a correction coming in the next few weeks. Rishaad stick with us if you would. Loads more to discuss. He is a global strategist for lgt Capital Partners. This is bloomberg. Back withou are Bloomberg Markets and we continue our discussion with lgt partners. We were coming to valuations in the u. S. They are expensive relative to others. Tell us why. A similar story with japan in terms of valuation. It is cheaper. It has good Earnings Growth. Is that has not been appreciated in japan by the market for reasons that are hard to understand, political, a lections in germany, elections in germany, other elections that raised issues, political issues within the eu. That is going away with germany looking like it will have a stable government, and the macro is fine in europe, one of the best. Rishaad a couple of years ago all we could talk about yields, 20 ,ear 3. 5 now, and portugal, recent Investment Grade as well. Yes. The economy is doing well in europe. You can say that is because of of ecb, but it is because Monetary Policy because that is an important thing, so europe is doing well. Pmis have more positive momentum than any other region in the world, so it is not reflected in equities prices. You can see that in earnings. Earnings are doing well. It is not yet reflected in prices and the market will close the gap eventually. Rishaad one of those things you have highlighted is the risk looking ahead, the possibility of this cyclical, or should i say this Global Growth story goes away. Suddenlyke that dont disappear, but what of the other risks . That is more mediumterm, not the next couple of quarters. There are two risks. Haves an outside risk, we continued acceleration in the global economy, at least in the four large economies, which is something you see in the pmi indices, and some Central Banks might be overzealous in terms of signaling a tightening of policies. In the u. S. Over the past couple of years looking back the initial plans of the Federal Reserve proved a little premature, and that might first of all, it might happen inin, but it might happen the u. S. And japan. We think it is better to be on the cautious side with short and durations. That is why we have raised a little cash. We are still overweight equities. Rishaad do you move away from growth to value in these parts of the world . Is that the narrative looking ahead . Atthat is not how we look things. We may be different in our approach here. We take a regional view on economies and let the Equity Managers to the sector selection. Selection. Sector it is a Stock Selection from which a Sector Allocation results. I would not frame it in those terms. Slightlyhen you take a more cautious view, the doesation in equity part tend to be more defensive, and i would suspect that is the case now as well, but it is not an explicit view because we have an overall positive view on the economy. Rishaad lets go back to your first answer and ended that way wayt it that way as well. What about european policy . European policy is right. We are in a sweet spot. The japanese framework is improving. With the economy performing as it is him as long as centralbank study the course, keep the course of study, i am looking ahead a little bit a couple of months or a bit more may be, and there i see the risks in japan being perhaps too tight. In europe, they are ok, just stay the course. Rishaad always a pleasure. Lgt Capital Partners with thoughts looking into 2018. This is bloomberg. Rishaad hong kong there. There we go. Victoria harbour looking fantastic. Cold day in hong kong, relatively speaking. Agreements. Tax cut taking place with republicans agreeing on how they should be implemented. We have to get the approval of congress to get this done. House prices in china. Also, bitcoin at 19,000 as another futures contract opens monday. A National Security speech, donald trump expected to call out china for in gauging in economic aggression, at least that is what ft is reporting. The u. S. And u. K. Give updates on Third Quarter numbers. It is the china open. Chinese stocks shaking off the doldrums apart from shenzhen, marginally lower. Shares in hong kong gaining ground after losing 1 friday. Says a strong start for chinese hshares could be around the corner after the Holiday Season and china is still under weighted by global funds. Focusing onnds banks, insurers, health care, and general consumption industries. Hshares up. 25 . China opening a key economic were conference monday. Raising by thee daily limit after tencent agreed to buy a 5 stake in the Supermarket Chain in a rare retail move by the tech giant. , chinaher early movers resources on the move, and nine dragon halting a drop. The last look at Noble Group Shares in singapore surging 25 , rebounding asvel, structuring talks continue, but the main focus is chinese and hong kong markets. Rishaad thank you. Lets get to new home prices in china. November new home prices rising in 50 cities month on month versus the same number in october. Cities in tier one particular with shanghai seeing existing home rises falling. 3 month on month and declines year on year and beijing november month,down. 5 month on new home prices in shenzhen the same, down. 2 currently. This is the story. We are seeing a decline in to your one cities in tier one cities. Price rises are chiefly confined two and three cities. To fiscal reform, changing gears, in the united states, first word news. President trump says he expects the economy to rock when Congress Passes the tax cuts. Thes plan this week with president hoping for his first major legislative victory. The bill was agreed behind closed doors and would slash the heporate tax rate to 21 and crosses the board tax cuts come a but then he them by 2026. Boris johnson has stepped back into the Brexit Debate, telling the sunday times he wants a deal that would give the government the power to reject eu laws. He said failure to do so would render the country a vassal state. On the other side of the channel , a chief eu negotiator confirmed brussels has no intention of offering the u. K. A more favorable deal than it has with anyone else. China looking for deeper financial links with britain post brexit with a britain and announcing 33 billion of support for u. K. Businesses to take part in chinas belt and road initiative. Other agreements incl