SHOWS: HONG KONG, CHINA (JULY 5, 2013) (REUTERS - ACCESS ALL)

TAI HUI, CHIEF MARKET STRATEGIST ASIA, JP MORGAN FUNDS

1. REPORTER OFF CAMERA SAYING:

'Japan's policymaker will release their price expectations ahead of next week's policy decision. How are you now advising investors' position when it comes to Japanese assets?'

2. TAI HUI SAYING:

'Well I think there're a couple of important points in terms of Japan. First of all, I do think the yen is likely to weaken further, given the contrast of policies between the Federal Reserve in the U.S. and the Bank of Japan. So in that sense, it is going to be a positive for equities. But not only for exporters if you look at some of the data of consumer confidence as well as consumer spending, we are starting to see Abenomics, at least the first two arrows, are boosting local consumer confidence. So in that sense, I think I am still optimistic on Japanese equities. But obviously the rally that we saw in the first half of this year is quite difficult to repeat in terms of magnitude. But nonetheless I still believe that there are more upsides to Japanese equities between now and the end of the year.'

3. REPORTER OFF CAMERA SAYING:

'China releases more economic data next week including trade. What policy implications should investors price into their China strategy?'

4. TAI HUI SAYING:

'Well I think to be very honest, the growth outlook for China remains pretty complicated. First of all, the export sector is still going through a deceleration and fixed asset investment and consumption are not really accelerating much, so overall the growth picture is a fairly subdued one. And as we've seen in the credit crunch in the past several weeks, the government is also not in any hurry to really loosen policy just yet even though growth may be disappointing. At the end of the day, they're looking at very rapid credit growth and the problems that could come with that, rather than the slowdown in the economy. So I'm not expecting a huge amount of policy easing in the next six months. We really need to see growth decelerate very sharply for just Chinese authorities to react. And therefore, I do think that growth in China is likely to remain around seven and a half percent for the rest of this year.'

5. REPORTER OFF CAMERA SAYING:

'You're recommending clients invest in Asian dividend stocks in a bear market, but are they not expensive at the current levels?'

6. TAI HUI SAYING:

'Well I think some of these are relatively expensive compared to historical, but not excessively so. And also if you look at their earnings growth as well as dividends growth, I do think that they do make sense as part of the asset allocation. Especially for those investors who are looking for income. Especially those who are about to retire or who have retired, I do think that we have seen a very important contribution from dividends to the overall total return profile of equities not just in Asia but globally.'