A former Beijing tour guide guides HSBC customers through a tumultuous stock market

(Bloomberg Markets) – Van der Herald’s journey to become director of Asia equity strategy at HSBC Holdings Plc began with a backpacking journey. After his freshman year at university in 1990, he left the Netherlands to travel almost all over Indonesia and China, learning Indonesian and Mandarin along the way. He returned to Europe, earned a degree in macroeconomics, and quickly made his way east. He worked odd jobs, including a stint as a tour guide in Beijing, before becoming an analyst in the UBS Group AG Jakarta office in 1995. Ten years later, van der Linde joined HSBC in Hong Kong, where he now considers a lifer- but he also feels at home in Jakarta, where his wife’s family lives. Working through the Asian financial crisis in the 1990s made him wary of market bubbles, so he was a skeptical start to China’s internet boom. He says one of his boldest calls now is that local investors are poised to dominate Asian markets. Van der Linde, 51, who has written three books—on markets, history and wine—spoke with Bloomberg Markets in December about the buying power of China’s starving parents and a young Mao Zedong could have wine tasted. The interview has been condensed and edited for clarity.

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JEANNY YU: What calls do you think the market will know you for?

HERALD VAN DER LINDE: Everyone loved the internet in China 12 months ago. We started being cautious on November 17, 2020, and then reiterated it on January 6, 2021, in a report titled Peak China Internet. To be honest, November was a bit early. So, in December and January, we received reviews. But eventually you see the markets went in the opposite direction.

We already knew at the time that regulation could become an issue. Valuations were very high. Everyone was overweight. Everyone thought it was going to continue. And we have already seen that this can, especially in Asian markets, go down very quickly.

So one of the lessons you learn over time is that you not only have to look at the numbers, but you also have to learn to read the sentiment. If everyone likes something, you’re going to be a little careful.

JY: What are your boldest calls right now?

H vd L: Asian markets will increasingly be dominated by Asian retail investors. In the past, Asian stock markets depended on global investors investing in emerging markets. This meant that if something went wrong in Argentina, people would sell out the Philippines or China. But if you have Asian investors buying in Asia, if something happens in Argentina, we don’t really care. So that link between Asia and other emerging markets is disappearing because we have our local investors in the region.

Another great call is the “empty nester”. This is a defining long-term trend. He is indeed interested in Chinese households. They had a one-child policy. This means that as they get older, their children are over 20 and leave their homes. So you have a change in the structure of Chinese households, in the way people live. In fact, many of these people may be in very good financial shape. Their purchasing power is really good.

JY: What brought you to Asia?

H vd L: I bought a ticket for the equivalent of €850 ($960), an economy class ticket to Bali. I went from Bali to East Indonesia and later to Jakarta and West Indonesia. I had a phenomenal experience and loved the place. I went to China and backpacked there. I decided that was where I wanted to go and live. When I graduated from university, I never looked for a job in the Netherlands or in Europe. My first job was actually as a tour guide in China.

JY: What prompted you to analyze stocks?

H vd L: My first real job in the financial sector was at UBS. I became an analyst in Indonesia. Their head of research, Rick Loo, hired me and taught me how to be an analyst. The stock market was not something I had studied in detail, but it taught me everything.

JY: How has Hong Kong as a financial center changed, especially after the national security law?

H vd L: There is no doubt that Hong Kong is changing. But again, in the 30 years I’ve been [around] here, people always say that something is going to go wrong in Hong Kong. But somehow Hong Kong always comes back with this almost unbelievable flexibility that you have in Asia. He is able to react.

This [city] will remain a separate unit because it offers benefits to China. Hong Kong will discover its new special place, as it has done before in its own history.

JY: What is the most unusual wine you have bought or tasted?

H vd L: One of the most unusual but interesting wines is called Madeira. The big problem with Madeira is that it won’t change, because of a particular type of production process. You can buy an 1850 Madeira and drink it now.

[In December] we dined with clients. I was able to find a bottle from 1927 here. So I talked a bit about what happened in 1927: Charles Lindbergh flew over [the Atlantic]; Volvo is the first car; in China there has been a revolution going on. All of these things happened in history. And then we opened the wine and drank.

You might like it or not. But you think, wow, it’s been in that bottle for almost a hundred years. You’re drinking something young Mao Zedong or Charles Lindbergh could have been drinking, aren’t you?

Yu is an equity reporter at Bloomberg News in Hong Kong.

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