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UBS AM’s China equities head: China is at a turning point

UBS AM’s China equities head: China is at a turning point

After a challenging start to the year, the new attitude of the Chinese government is a positive signal for the country’s stock market, according to UBS Asset Managment’s head of China equities, Bin Shi (pictured).

The AAA-rated manager of the UBS (Lux) Eq Fd - China Opportunity and UBS (Lux) Equity Fd - Greater China funds believes that this makes a compromise on US/China trade issues more likely.

He said: ‘BMW’s recently announced move to take majority control of its local joint venture with Brilliance Automotive, a China-based automaker, shows that the Chinese government has opened up key industrial sectors to investment from overseas companies, reversing its position of limiting investment into China. That had been a key source of disagreement in the US/China trade dispute.’

The Chinese government has also reversed a series of policies introduced earlier this year, such as its social security tax and taxes on private equity investments.

Shi said that he has now deployed some of his cash position, which he had increased at the start of the year in response to the market volatility.

He said: ‘We expect to put more cash to work because we believe that current valuation levels in China’s equity markets are attractive, and we see many opportunities to invest in.’

Among the manager’s favourites are the gaming and education sectors, as they will benefit from looser government regulations.

He is also positive on consumer stocks, IT and healthcare.

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