Chinese equities, the best wagon on the train

Recent data increasingly support the view by Swiss investment bank, UBS that US growth is about to slow. This has significant implications for Asia, with its numerous export-oriented

economies. UBS find that Chinese equities are well positioned in this environment, as China is less export-oriented than most other Asian countries. Moreover, UBS see reasonable valuations and strong earnings momentum, which make China’s overall risk/return profile attractive.

Given the upcoming slowdown in the US economy, which will also affect export-oriented Asia, equity investors might ask themselves if it is time to leave the Asia train and wait until the US outlook improves.

While we would not suggest jumping from the Asia train, it is important to choose the right wagon. In light of the weakening US growth, UBS regard the China wagon as a comfortable place to be in.