Bloomberg Daybreak: Asia• Apr 28, 2026• 19:30Interview

Bank of America's Bernard Mensah on Business Plan, Asia Stocks Higher | Bloomberg Daybreak: Asia...

From Bloomberg Daybreak: Asia

Bernard Mensah•President of International, Bank of America

Executive Summary

Bank of America is strategically expanding into private credit with a $25 billion commitment and growing its international headcount, particularly in Asia, while leveraging AI to enhance productivity without reducing its overall workforce.
China's economy is demonstrating significant resilience, with Q1 GDP and industrial profits beating expectations, positioning the country to benefit from global disruptions through its dominance in clean energy equipment and strategic resources.
Investor sentiment is turning bullish on Chinese A-shares, evidenced by record hedge fund positioning and strong retail account openings, driven by the country's supply chain strength and a burgeoning domestic AI sector.
Geopolitical tensions, specifically the Iran conflict, are negatively impacting global macroeconomic forecasts, with analysts revising growth downwards and inflation upwards, particularly in energy-dependent Europe.

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Concerns Raised

The impact of the Iran conflict on global energy prices, inflation, and economic growth.
Potential for margin squeeze on downstream Chinese manufacturers unable to pass on higher input costs.
Sustainability of massive AI-related capital expenditures and the long-term return on investment.

Opportunities Identified

Investing in China's resilient supply chain, particularly in clean energy equipment and strategic resources.
Participating in the growth of private credit, especially in underserved and fast-growing markets like Southeast Asia.
China's domestic semiconductor and AI hardware sector, which may be at the beginning of a major capex cycle.

Key Themes

China's Strategic Resilience and Supply Chain Dominance

Despite global tensions, China's economy shows surprising strength with better-than-expected Q1 data. The country is leveraging its position as the world's largest provider of clean energy equipment and its control over strategic resources like metals and fertilizers to navigate and potentially profit from geopolitical shifts.

This resilience presents a unique investment thesis, suggesting China's A-share market is attractive for investors seeking growth that is partially insulated from Western economic cycles and geopolitical shocks.

The Institutionalization of Private Credit

Bank of America is making a significant $25 billion commitment to the private credit space, signaling a broader trend of major financial institutions entering this market. The bank sees opportunities globally, with a particular focus on high-growth regions like Southeast Asia, viewing the current environment as a 'healthy clean up'.

This move validates private credit as a maturing asset class, offering alternative financing for companies and new opportunities for investors as traditional banks expand their balance sheets into this sector.

AI as a Driver of Efficiency and a New Capex Cycle

AI is a dual-faceted theme, serving as an operational efficiency tool for established firms like Bank of America, which uses it for customer service and fraud detection. Concurrently, China appears to be on the verge of its own AI capital expenditure boom, driven by domestic chip development (Huawei's Ascend) and cost-effective models (DeepSeek).

This highlights two distinct investment angles: established companies improving margins through AI adoption, and the massive secular growth opportunity in the underlying AI hardware and infrastructure, particularly within China's developing ecosystem.

Fracturing Globalization and Shifting Capital Flows

Global trade patterns are re-regionalizing, with China strategically redirecting exports towards ASEAN nations to mitigate direct trade friction with the US and EU. This is occurring as capital flows, from both hedge funds and retail investors, show a strong resurgence of interest in the Chinese A-share market.

Investors must recognize the shift from a single globalized system to a multi-polar one, creating new economic blocs and opportunities. The renewed capital flow into China suggests sophisticated investors are looking past headline risks to specific growth stories.

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Topics

Private Credit Bank of America China Economy Artificial Intelligence (AI)Supply Chain Resilience Geopolitics Iran Conflict Inflation Global Growth Chinese A-Shares Clean Energy Semiconductors Huawei ASEAN Capital Flows

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