Resonac Dips, Alibaba Falls, East Japan Railway Up

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0:08 The Stock Movers Report. Your roundup of companies making moves in the stock market. Harnessing the power of Bloomberg data.

0:16 Now, let's take a look at the stocks on the move today in Asia. I'm Caroline Hipkin. I'm joined by our markets reporter, Anthony Stevens. Anthony, come on. What can you tell us about Tesla and meta earnings and their impact on Asia? What's going on? Why were they badly received? Why is there something of a sell-off? What is it about this enormous capex?

0:36 To be fair by you, that's what every trader is asking themselves in Asian equities, right? We started off on the front foot, had about a percent up across the board as an indication. And then Tesla came in and they dented the picture a little bit by cutting back on their AI CapEx. And that should have dented, you know, shares of robot names, kind of passive components. And those shares are down. So, for example, we have Resonac down 12.

1:01 But it's really become a much bigger problem. The likes of Samsung and Hynix are down around 5%. And the reasons for that are a little bit harder to explore. Sure, there are reports of slowing price increases in memory and PCs, but it really does appear that CapEx alone is not enough for investors at this stage, especially from Meta, where they say that they are doing really well. They have a monetization path to AI. But the CapEx at the moment, what investors are looking for is really, really high numbers.

1:32 And any kind of restraint or constraint in CapEx is really starting to hurt things. As a case in point, we had Jensen Huang in your part of the world, in Berlin, at GDC Berlin, talking about capacity shortages. And he outlined a plan to alleviate those shortages in the long run. But in the short run, those names are all getting hammered in Asia. As people basically say that, you know, the profit bubble, if it cannot be monetized right now because of capacity, it might not get monetized at all.

2:02 Yeah, isn't that interesting? I mean, Zuckerberg was also talking about the success of Muse on the conference call, which I thought was interesting. 10 million people using it in the US and Canada in its first six weeks. I mean, look, I'm a baby AI user, I will confess, but I'm trying to get the hang of it. And you can't, of course, because in the UK, you can't get Muse, you can't download it. So anyway, that's my thought. What about Chinese stocks? Internet names are in focus there. Just tell us about that.

2:29 So you have this kind of bifurcation. It's a nice segue for Muse, actually, because you have the American ecosystem moving away from enterprise AI into consumer AI. And China hasn't monetized either. And right as they fail to monetize that, you have the government looking to regulate their e-commerce platforms.

2:48 They want less fake goods on there, which to alleviate these problems that they have with Europe on trade and with copyright in the US. And that's hitting these Chinese internet shares, because they make money on these online shopping platforms that they need to deploy into the AI space. that perception that their earnings from the e-commerce side will slow down just as AI spending ramps up is really hurting perceptions in China. So you have Tencent down around 4%, which is a huge move for that stock. Alibaba is down 6.5%. The HSTech index overall is down around 5%.

3:24 And even relatively insulated plays like the video maker Kuaishou is trading at record lows.

3:29 Yes. Okay.

3:30 That is interesting. As investors are therefore getting into which part of the market looking for safety? Yeah.

3:38 So, all these high yield names are getting a safety bid. So, we've talked at some length about the outperformance of Chinese banks. Those have been a pretty resilient sector. But now people are borrowing even further under the ground to hide in names like Japan Railways. So, you have all the Japan Railways up around 2% against a market that's down 2%.

3:59 Changhua Telecom in Taiwan, that name's up 2.6% against the run of play there with the market down 1%. And also we have kind of the old boring Asian pharma names like Takeda doing really well at the upper round percent in this kind of market.

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