00:00Let me start with what's happening today, because we saw a sell-off in stocks, especially because of geopolitical headwinds.
00:07What is your outlook and what are you watching for in China markets in, I guess, the next quarter?
00:11Well, I think for China markets, still people are very keen on getting involved with all this AI trend.
00:19So we don't really, well, of course, there has been some, you know, reflections of the geopolitical issues in Chinese
00:27market as well.
00:28But I think people are still quite excited about the new trend and new, you know, technology taking off.
00:35So you can see that yesterday and the market really reflect very heavily on the AI and all the economy
00:42and technology side.
00:43What are flows telling you now in terms of where sentiment is?
00:46Well, the flows are, you know, depending what kind of investors you are.
00:51And retail investors definitely still, you know, adding up to the fires.
00:55And there are definitely institutional investors starting to look at the dividend side of the business.
01:02And the large caps are still attracting some attention, I think.
01:07What are you seeing in terms of flows for domestic retail investors?
01:11Domestic retail investors at the same time, I think, well, we mentioned deposit migration before.
01:18So we definitely have seen gradual inflow from deposits into investment side of the business, but it's kind of slow.
01:26But there are separate retail investors really are getting involved with ETFs.
01:31So we have seen investor size and accounts opening quite growing rapidly in the ETF, you know, side of the
01:39business.
01:40I was going to get your take on what we just spoke to Paul Chen about, about the regulatory environment
01:44right now.
01:45There's been some growing concerns about cross-border trading and mainland investors coming to Hong Kong, you know, in some
01:54ways to open accounts and whatnot.
01:57You know, Paul Chen says they need to still restore some confidence when it comes to mainland investors about this
02:01unwarranted leakage in foreign exchange reserves.
02:05Have you seen any sort of impacts on these cross-border curbs on the ETF business and the flows coming
02:11here?
02:12Well, I know there has been some different interpretation of the reasons some regulations are tightening up.
02:17But to us, one, I think the regulations were already there.
02:21It's just how we comply with it is an issue.
02:25So in the past, there probably the compliance is not that strict.
02:28And now, I think just cleaning the house and trying to make more regulations complied, I think that's the basic
02:36line for any, you know, legal regulation side of the business.
02:41At the same time, we have seen a lot of interest from domestic investors into QDI products.
02:47And I think that our, you know, regulators are also encouraging this type of regulating and really, I think, compliant
02:57type of investments, investing overseas.
03:00So we have seen China AMC, we really have seen a lot of growth in our QDI AUMs recently.
03:07You talk about the QDI products.
03:10Obviously, there is a cap as to how much mainland investors can put in.
03:13And what sort of products are you coming up with to draw flows, to allow Chinese mainlanders access to these
03:20overseas products?
03:21Yeah, I think the regulators also are trying to diversify the channels that we can invest.
03:27You probably have learned that we have ETF Connect.
03:30So we can actually invest through ETFs into overseas market currently, right?
03:36Another side is the mutual recognition.
03:40Actually, China AMC, we recently got approved a new product from mutual recognition.
03:45So that also is one channel that we can invest in international side of the business.
03:51And another one is the Great Bay Area Connect.
03:55So those type of connects, I think, in the future, will expand to greater regions and then involve more investors
04:02into the process.
04:03You just launched this tokenized gold fund, which we talked about last time, Timae.
04:09Tell us a little bit more about this.
04:10This is the first fully tokenized gold fund.
04:13What does the demand look like here right now at a time when gold prices aren't quite behaving like they
04:18used to?
04:18Yeah, I think, well, the first layer is still a gold fund.
04:23So from, I think, the demand side, I think for gold, people have always been strong demand for gold, even
04:31though there's volatility.
04:32And another layer on top of that is the tokenization.
04:36So I think we are aiming to prepare the infrastructure for digital assets.
04:44But as for demand, because it's a long process as to how the infrastructure is going to be built, I
04:49think we'll be coming and growing together with the digital assets growth in this region.
04:55And speaking of digitized assets, you're one of the first movers when it comes to tokenized RMB assets as well.
05:03Just talk to us more about that and why should investors be looking into these alternative assets?
05:08Well, I think, well, when we look at products, it's not just investors, but also people who already have those
05:16assets who invest.
05:17So I think digital assets, if you look, think of it, people who hold digital assets really have the need
05:25to invest in different instruments.
05:27And we are preparing the infrastructure.
05:30We are preparing the layers of investment accessibility into the traditional world with our tokenized products.
05:37So I think people, it's not like traditional investors really need to invest in tokenized products.
05:43But it's more like people who hold digital assets and their needs in investing in tokenized products.
05:51And when it comes to the ETF space in mainland China, right, it's still highly regulated.
05:57There isn't any, for example, actively managed ETFs.
06:00Tell us about some of the innovations you are seeing within that very tightly regulated space.
06:05Well, I wouldn't say it's really highly, highly regulated because we already have the, well, in the sense,
06:13more active type of ETF is index enhancing ETF.
06:17So even though it's not completely passive, but it's not really like going, we are going to work the active
06:26side of the, you know, indexing and ETFs.
06:29But I think people really need to phase in, right?
06:32So we need to adapt to ETF, adapt to more actively, you know, managed type.
06:38And then I think definitely we are going to get active ETF in the future.
06:43But as to how the needs are going to transform into the local market, that's really going to determine when
06:50and how we are going to push that kind of products.
06:53I was going to get your take on leveraged ETFs.
06:55Yes.
06:56Because we've seen what's been going on in Korea.
06:57Yeah.
06:58And some of these listed ones in Hong Kong, which in some ways, you know, investors are now trying to
07:04find that protection to the downside.
07:07And it's magnifying a lot of the moves that we're seeing in the KOSPI and the last.
07:12I mean, how do you see this phenomenon playing out here and how the ETF market is really impacting overall,
07:18you know, sentiment?
07:20Yeah.
07:20Well, I think it's two sides of the work, right?
07:23We have seen a lot of the, you know, really momentum from the leverage side.
07:30And we also probably in Hong Kong, I think, well, from what I've planned in our Hong Kong office, we've
07:37probably there will be new products coming out in Hong Kong as well.
07:41But at the same time, we when we seek protection and then there could also be the places we are
07:49exposed to higher risks.
07:50So I think it's a balance for how much products we offer to the markets and how we are going
07:57to educate investors as to what's the implications really investing in such products and the volatility that will impact their
08:05returns.
08:07So Hong Kong in some ways has been used to be a gateway for international investors to trade China.
08:14But now it's sort of the flip side where you have Hong Kong being a gateway for Chinese investors to
08:18tap international capital.
08:20What is your view on fundraising for many of these upcoming IPOs in the pipeline and access to international capital?
08:29Yeah, definitely.
08:29I think Hong Kong has always been like the bridge and bridging between, you know, well, domestic money going out
08:37and international investors investing in China's economy.
08:40And we are quite excited about all the new IPOs, especially from the new economy and giving a chance for
08:47international investors to more accessibility into the Chinese economy.
08:52So we are very much looking forward to participate not only from our investment side, because we also have QDI
08:59products that can invest in Hong Kong market.
09:01At the same time, we are actually attracting international investors' attention.
09:06So we have, you know, products in Thailand, we have products in Brazil that investors are very keen in investing
09:14in the technology booming in China.
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