UBS: Foreign investors' interest in allocating Chinese assets is increasing, with significant room for further increase.

UBS Group President of China, Chairman of UBS Securities Hu Zhizhi, and Co-Head of UBS Securities Global Investment Banking department Chen Ge stated at a media seminar that the proportion of global actively managed funds investing in Chinese stocks has increased from around 5% in the fourth quarter of 2024 to nearly 7%, but still lags behind the historical high of around 15% in 2021. Chinese assets are still under-allocated in the portfolios of global actively managed funds, with significant potential for further increase. Profit improvement has become an important factor for UBS to be optimistic about Chinese assets. UBS' data shows that overall profit growth in the A-share market in the first quarter has exceeded 7 percentage points. Based on this, UBS has raised its full-year A-share profit growth forecast to 11%. The UBS research team believes that the renminbi is the most fundamentally supported core currency globally this year, with a potential appreciation of 3% to 4% against major currencies, which will provide additional incentives for foreign investors to participate in the A-share market.