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<Research>UBS Continues to Favor Large CN Internet Stocks Among H-shrs, Adds JD & BIDU to Model Portfolio
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Since the outbreak of the Iran conflict, the MSCI China Index has outperformed global indices by approx. 1.4%, while A-shares showed even greater resilience as the CSI 300 Index remained largely flat during the period, UBS released a research report saying. The broker believed that this further demonstrates that the Chinese equity market offers viable diversification options for global investors. From a fundamental perspective, recent geopolitical events posed relatively limited downside risks to the China market, due to factors including: 1) China's low dependency on oil, accounting for only about 20% of total energy consumption; 2) ample oil inventory reserves (approx. 4 months or 1.3 billion barrels); 3) due to government pricing mechanisms, the rise in oil prices has not fully transmitted to downstream customers; 4) higher input costs may drive up PPI and price expectations, which could be beneficial in the current deflationary environment. Among A-shares, UBS preferred hardware tech, non-ferrous metals, internet, electrical equipment, brokers and stocks related to 'going abroad.' As for H-shares, the broker continued to favor large internet companies, and added JD-SW (09618.HK) and BIDU-SW (09888.HK) to its model portfolio due to their low positioning, inexpensive valuations and active shareholder return initiatives. AASTOCKS Financial News Website: www.aastocks.com |
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