do you think china exposure at least for the rest of this year is really in the realm of treating it like an alternative investment so alpha as opposed to a better call so in other words you still need to have pretty elevated appetite for risk to be buying yes i think you know if you look at the market you know year to date china is only you know flat but us market is up 15 so the direction is huge and its going to be volatile i think one of the key thesis we have is instead of beta we can think about the ipo part of the strategy for example some of the domestic convertible bond trading strategies up around you know high single digit and if you look at some specific sector you know some of the chinese bank is actually up 20 and some of the white goods manufacturers up midsingle digit sorry midteens so instead of a beta market play i think right now china is more like an alpha in divergence you know strategy for global allocators the china plus one theme is interesting too so weve talked a lot about companies that have indirect exposure to china from outside youre looking at companies inside china that have exposure to growth stories outside of china the idea well is getting traction domestic in the mutual fund industry and the hedge fund industry as of now i know there is around 500 you know domestic chinese companies have exposure in the asean countries if you like and theyre building more production facilities and then theyre expanding market share in that region im still quite early as a theme domestically in china but we are seeing those stocks being you know some and we believe the theme you know will continue so lets kind of dig into that more because there is so much what skepticism doubt yes there seems like china obviously its a huge country huge economy its got potential but when you say you like high end manufacturing and the domestic consumption play especially at a time when the signals were getting from the consumer have not been the strongest what do you what do you see there well i think the key question as a fund manager im asking are there china at right right now is one how much of the bad news is priced in i believe you know its well pricing by the market if you look at the data you know yesterday and the is actually up you know in hong kong so i think from the economic perspective a lot of bad news or anything pricing but at the same time how much of the good news is being pricing by the market i believe a lot of the big stimulus expectation is also being pricing by the market so thats why you know in terms of our approach we are more focusing on the fundamental you know earnings or fundamentals specific policy catalyst rather than the flu bomb you know market catalyst so back to the consumption theme we believe you know cash kill point or the third and fourth stimulus is on the way and this is you know the way you should be and thats why some of the white goods manufacturer is the theme that were interesting on and theyre treating it they kind of price to earnings ratio unit 2 and midteens you know year to date and high manufacturing is more like a subsector you know as a portfolio manager and when we talk to the peer group i think people are looking for more high end trip area you know manufacturing sector and you know components pacific themes and those would be less vulnerable or less sensitive to socalled big stimulus risk on risk off you know involvement so how much you depending on domestic demand domestic consumption and how much you can depending on overseas consumption and demand when you when you look at which you know which companies youre choosing to invest in because its possible the us or at least be in a mild recession by the end of the year its possible the eu i mean these are huge huge markets for what china produces exactly were overweighting the companies that focus more on the domestic consumption you know and i would say two third of our portfolio is in that area and one third of the export is more sensitive to the global given there is so much uncertainty in terms of demand globally you know inflation rate i but i think the domestic china consumption story is intact and there is more upside if there is more cash kill point type of stimulus and one important thing to point out not why we cover it is the volume in the june 18th you know sales event when some of the white wine manufacturer a lot of goods manufacturer when they cut price actually we see volume increase you know in those goods that means actually that the money stay as long as the manufacturer or the seller willing to cut price so i think that the market is weak but its not as weak as being priced in by the market the tech story for china it looks like its winding up at least when it comes to alibaba is this enough to rejuvenate investor confidence across that sector particularly if were leading the way to some ipos is that going to be a catalyst for more interest yeah i think its picking up you know ive been you know quite bearish on tech in a while given you know the some that kind of like china proxy play but i would say right now the big tech names listing in hong kong is becoming a call option on the china market one is the valuation is very demanding second is there is some you know positive catalysts you know when they spin off or listing some of their subsidiary usually you know when a conglomerate you know listing subsidiaries they try to work you know as hot as possible you know to produce you know good earnings and numbers and i believe those would be some you know catalysts and secondly i believe you know right now the global sentiment towards the china market is in the low end and usually these type of pet names is the proxy when global investor be investing or coming back you know to asia or hong kong so i think these type of big tech companies carried this too characteristic hence you know we are getting more positive on those companies you know we know that the chinese retail investor can be a powerful force when it comes to moving markets do you have any sense do you have a read on where that investor sentiment is now is it still very cautious worried about a slow recovery are there people are kind of just waiting for a chance to put their money into stocks into investments and you know watching it grow there is two good you know data point to focus on for the retail sentiment one is the market turnover of the asia market which is right now is 07 trillion renminbi which is now around 70 of the normal level that indicates really on the local level the second is the margin utilized by the retail investor again is also on the very low level so i believe a lot of money is sitting on the sidelines but dont forget you know chinese retail investor is quite spontaneous if there is a bull market or coming back it could happen you know in a week or two and lastly if you look at the mutual funds and combined or mutual fund inflow i think there are also on the low side thats why when you see the saving rate the cash deposit you know in the chinese bank theyre at historical peak level