China should still be a top pick for global investors despite trade tensions, UBS says

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Catherine Cai, Executive Vice Chairman & Chairman of Greater China of UBS, speaks during Fireside Chat on Day 2 of CNBC East Tech West at LN Garden Hotel Nansha Guangzhou on November 28, 2018 in Nansha, Guangzhou, China

Cai was asked her opinion on the impact it’s having on the markets in China. She said: “I think every article, people read different views on what is going to happen three days from now … I think everybody hopes the two leaders will reach some kind of agreement because it will be good for the world economy, particularly very positive for China and the U.S.,” she said.

“The market has been very fragile and in the past two weeks the whole market both U.S. and China has been further weakening. So the market is waiting for good news and nobody wants to see bad news from these two leaders meeting,” she added, but said the market wants to see something specific and not just hand shakes between the two leaders.

Regarding Chinese assets, Cai added that global equity investors should perhaps be shifting to more stable parts of the economy during this trade turmoil, suggesting that growth stocks and technology could see more volatility.

“A lot of people mention the trade war will bring more damage to the China market but not necessarily. Any war is going to damage both sides,” she added.

“In past two weeks, the U.S. market has turned very soft, a lot of big tech names have lost their market value in a very significant way. Take for example Apple have lost $200 billion in market valuation. Also, a lot of economic indicators from the U.S. demonstrated the potential softening for the upcoming years … So I hope the U.S. government also realize the trade war, more or less, is also going to impact the U.S. economy and not only China’s economy,” she added.