UBS favors A-shares

Business | 10 Jan 2020 4:13 pm

UBS Global Wealth Management is underweight Hong Kong equities.

Hong Kong is expected to record economic growth under 1 percent, said Min Lan Tan, head of chief investment office, Asia Pacific of UBS Global Wealth Management.

UBS is overweight mainland A-shares with an estimation that China's economy will be relatively stable this year, preferring e-commerce and consumption stocks.

Tan expects local companies will have low single-digit earnings growth, compared with overall average profit growth of 10 percent for Asian companies.

She also predicts local home prices to slide by 5 percent this year.

UBS also forecasts that People's Bank of China will cut the required rate of return by 50-150 basis points by the end of this year and China's GDP growth could be around 6 percent.

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