The domestic drivers for Chinese equities

China/UBS/trade-war/equities/

7 August 2019
| By Laura Dew |
image
image
expand image

Long-term fundamentals remain attractive for China, says UBS, despite the noise and volatility surrounding the US/China trade wars.

In a market outlook, the firm said equity valuations for China remained attractive particularly for consumer, IT, healthcare and insurance sectors.

The firm agreed the markets would remain volatile as the US/China trade war discussions were unlikely to be resolved soon but that the four long-term fundamentals were unchanged by the noise.

These were growing consumer demand and robust consumption growth, continuing urbanisation, strong investment by companies in research and development and the ageing population which created demand for healthcare and insurance.

Head of China equities at UBS, Bin Shi, said: “We’re confident these fundamentals still have much more room to grow and that means opportunities on China’s equity markets for disciplined investors.

“Current valuations on China’s equity markets remain attractive on both historical measures and compared to other markets in the Asia-Pacific region. Now that reforms such as Stock Connect have opened up China’s onshore equity markets, an All-China approach that allocates to the best equity opportunities whether in onshore or offshore China markets may offer the best way for investors to capitalise on the many opportunities in the China equity space.”

Earlier this week, the Chinese were accused on manipulating their currency after the renminbi fell below seven against the US dollar for the first time since May 2009.

Performance of Shanghai Composite Index and MSCI China over one year to 6 August, 2019

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

MARKET INSIGHTS

So we are now underwriting criminal scams?...

1 month 3 weeks ago

Glad to see the back of you Steve. You made financial more expensive, not more affordable as you claim, and presided ...

2 months ago

Completely agree Peter. The definition of 'significant change is circumstances relevant to the scope of the advice' is s...

4 months ago

Entireti has unveiled the new name for the AMP financial advice businesses that it acquired last year....

4 weeks ago

A Sydney financial adviser has been permanently banned from providing any financial services, with the regulator deriding his “lack of integrity, trustworthiness and prof...

2 weeks 6 days ago

Minister for Financial Services, Stephen Jones, has provided further information about the second tranche of the Delivering Better Financial Outcomes (DBFO) reforms....

1 week 5 days ago

TOP PERFORMING FUNDS