Swiss bank UBP returns to Chinese markets

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(Corrects the second paragraph to say that the bank has exited positions in all Chinese stocks, not just mainland-listed stocks)

By Summer Zhen

HONG KONG: Swiss private bank Union Bancaire Privée (UBP) is back in Chinese markets, its chief investment officer said, returning to the world’s second-largest economy after pulling out last year.

UBP has over $150 billion in assets. It returned to China in August after exiting all positions in Chinese equities and credit by the third quarter of 2021, wealth management CIO Norman Villamin told Reuters.

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“We went from zero to neutral,” said Villamin.

While many institutional investors have reduced their exposure to China since 2019 due to a regulatory crackdown on tech giants, a deterioration in Sino-US relations and a strict zero-COVID policy, UBP is one of the few to re-enter the country. is assigned.

Villamin said UBP saw some “hope” that more stimulus would come before and after the Communist Party Congress in October.

“If some of the COVID restrictions start to ease, even if it’s gradual, at least we’re moving in the right direction,” Villamin said.

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UBP viewed an underweight position in China as “tactically risky,” he added.

“China has been through a recession, while Europe is in the midst of a recession and the US is likely to enter a recession by 2023,” Villamin said.

However, UBP has only bought Chinese A-shares, which is the domestic sector, avoiding companies that may be exposed to geopolitical issues.

Chinese markets have faced unprecedented challenges this year, with both the CSI 300 index and the Hang Seng index falling more than 20 percent each, while hedge funds investing in Greater China recorded their largest net outflows in at least 15 years. see year.

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UBP believes China is slowly poised to recover, although things will not be smooth sailing. Some deep-seated problems, such as the real estate debt crisis, will take a long time to resolve.

“We think[China’s)goalinrealestateistoshrinkthesectorasashareoftheoveralleconomyinordertodeleveragethesector’saidVillamin

“We don’t see a lot of growth opportunities there.”

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