UBS Group remains hopeful about Chinese stocks , citing The recently halted tariffs with the U.S. , potential stimulus measures from Beijing And appealing lower valuations were cited as major factors, said a senior executive.
China and Hong Kong present valuable investment opportunities due to their current valuations, which I believe will attract market attention," stated Neil Hosie, Global Head of Execution Services at the Swiss bank, during his visit to Hong Kong last week. He also mentioned that additional stimulus actions from China have the potential to enhance both the market performance and positive outlook.
The bank maintained an optimistic position as international investors seemed inclined to move their investments out of US stocks and expressed worries regarding other types of American assets due to trade disputes.
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The London-based analyst Hosie mentioned that the U.S. had an outsized presence in the MSCI World Index, accounting for 72 percent of its weight. This portion included investments from or representations of 20 American firms making up 31 percent of the total weight, as stated by him.
He additionally mentioned that U.S. equities appeared overpriced. According to Bloomberg data, the Nasdaq’s most recent P/E ratio was around 31.70, whereas the Hang Seng Index in Hong Kong stood at approximately 10.86 and the primary board of the Shanghai stock market was at about 15.60.
"Given the ambiguity surrounding the economic forecast, current valuations seem unwarranted, and one would anticipate a pullback in stock prices; however, this has not occurred," stated Hosie.
International investors became interested in Chinese stocks due to Beijing's economic policy initiatives in September and the rise of AI startup companies. DeepSeek Interest has started to grow gradually, leading to higher investments in 's budget-friendly versions, according to Hosie.
Institutional investing has gradually shifted from the U.S. towards certain regions in Europe and Asia, albeit at a cautious pace," according to Hosie. In September, individual investors seeking rapid gains entered the Hong Kong and Chinese markets, "however, currently we're seeing a shift as longer-term investors start conducting thorough research.
Last month's 90-day tariff cease-fire along with expectations of local stimulation measures from Beijing has paved the way for increased investment flowing into China’s market sectors.
"It appears to be an opportune time for investments to pour into the Chinese markets, and we seem to have moved beyond the most challenging part of negotiations," Hosie stated.
Moreover, Hong Kong’s rejuvenated initial public offering (IPO) market has positively impacted general market mood and liquidity, as per Hosie. This year, IPOs in the region have garnered approximately $10 billion, with over 150 enterprises awaiting listing, reported Hong Kong Exchanges and Clearing.
"Once the IPO market revives and trading volumes rise, benefiting both brokerage firms and individual investors, this can lead to increased consumer spending in Hong Kong," according to Hosie.
We observe talented individuals coming back to Hong Kong and successfully luring top-notch professionals to work here.
Last week, UBS wrapped up its prominent Asian Investment Conference in Hong Kong, noting a significant rise in participation from American investors. According to Hosie, US attendance surged by more than 70 percent compared to the previous year. Additionally, overall international turnout increased by over 50 percent as well.
Hosie noted that we are currently in a situation where there is growing interest among individuals to invest in this region.
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