Latest news with #UBSSecurities
Yahoo
3 days ago
- Business
- Yahoo
UBS Securities' Moriya on Japan Markets, Strategy
Nozomi Moriya, Japan Equity Strategist at UBS Securities, discusses her outlook for Japanese markets and investment strategy. She speaks with David Ingles from the sidelines of the "UBS Asian Investment Conference" in Hong Kong.
Mint
6 days ago
- Business
- Mint
UBS flags India's high-risk premium despite recent equities upgrade
Given that corporate earnings growth in India has been stable, the exorbitant risk premium—extra returns that investors expect from riskier assets—linked to Indian equities is unreasonable, global brokerage UBS Securities said. India traditionally carried a 20-25% risk premium versus other emerging markets. However, recently, that premium has soared to 60%, a level unjustified by the current pace of corporate earnings growth, Sunil Tirumalai, head of Emerging Markets and Asia Equity Strategy at UBS Securities, said during a virtual media briefing on Tuesday. Indian equities often carry a high risk premium, driven by their long-term growth story and the appeal of a young, consumption-led economy. But alongside this optimism come challenges like policy uncertainty, market volatility and currency risks that make investors demand extra returns. The premium reflects both optimism about India's future and the risks tied to it. Also read: Global stock markets not pricing in severe downturn just yet: Nomura's Karkhanis In late April, UBS Securities tactically changed their equity strategy for emerging markets to domestic and defensive-oriented sectors in view of global trade tensions, while upgrading stance on India to neutral from underweight. However, a stronger case to invest in India will likely emerge when corporate earnings growth picks up, manufacturing gains traction and US-India trade negotiations reach a breakthrough, Tirumalai said during the briefing ahead of the UBS Asian Investment Conference in Hong Kong. From September 2024 to May 2025, the Nifty 50 and the Nifty Midcap 150 indices went through a full peak-to-trough-to-rebound cycle—correcting 16% and 21%, then recovering 13–17% from their February and March 2025 lows, respectively, highlighted a 22 May report by Elara Capital. Yet, the market that has emerged looking fundamentally different, it read. 'The drawdowns were valuation-led and broad-based; the rebound has been rotational, earnings-supported on a selective basis, and anchored in lower-multiple segments." Meanwhile, even foreign inflows into India seem to be back as India is seen as a relative safe haven. Also read: PTC Industries: How high can the stock really go? 'FIIs turned positive on most of the emerging markets as news flow on trade and tariffs improved," said a report by BNP Paribas dated 14 May. Markets have reacted positively to the tariff pause, US-UK trade deal and rollback of recent tariffs between the US and China, the report said. Analysts suggested that a clearer global tariff outlook was essential for the return of FII flows. Over the past month, many believe that uncertainty surrounding tariffs has eased. As a result, Foreign Institutional Investors (FIIs) have purchased Indian equities worth $6.1 billion over the 16 trading sessions leading up to 8 May. According to a report by BNP Paribas, FII ownership in Indian markets, which had been on a downward trend for several years, has stabilized since February 2025. Net FPI investments in Indian equities turned positive in April, with inflows of ₹4,223 crore, following three straight months of outflows— ₹78,027 crore in January, ₹34,574 crore in February, and ₹3,973 crore in March. So far in May (up to the 26 May), FPIs have made net purchases totaling ₹14,429 crore, according to data from NSDL. Tirumalai said that when the dollar softens, emerging markets usually gain, adding that he expects the greenback to stay weak through the rest of 2025. Also read: This fertilizer stock rose 88% in a year. Will MSCI entry trigger further rally? A weak dollar makes emerging market assets like Indian equities more attractive to foreign investors, as their returns improve in dollar terms. It also eases funding conditions globally, encouraging capital flows into higher-yielding markets. In 2025 so far, MSCI EM has gained nearly 9% while MSCI India is up 3.4%. UBS Securities continues to favour China for now, citing its attractive valuations and comparatively stronger fundamentals. Meanwhile, J.P. Morgan noted that Chinese equities have recovered most of the losses since US President Donald Trump's 2 April "Liberation Day" tariffs announced to curb imports, like the rest of the world, but have lagged the performance of the EM benchmark, as well as the developed market benchmark. Within the emerging market pack, Chinese equities were the worst hit in the post-Liberation Day sharp de-risking, down 13% in less than a week, the 19 May report highlighted. 'We recognize that 90 days may not be enough for the US and China to deliver a trade agreement, and the tariffs noise is unlikely to go away, but we do not expect the US to again adopt an aggressive trade stance towards China, which could allow EM equities to trade better," said J.P. Morgan analysts in their equity strategy report, while upgrading their stance on emerging markets to neutral from underweight.
Economic Times
06-05-2025
- Business
- Economic Times
UBS finds 4 reasons to be bullish on Indian stocks, picks 4 fav sectors
UBS forecasts an 8% Nifty 50 upside over the next year, driven by a Rs 7 trillion consumption stimulus, lower oil prices, resilient rural demand, and attractive valuations. The brokerage favours financials, autos, real estate, and consumption sectors, while remaining cautious on IT, industrials, and pharma due to global uncertainties. Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads UBS's top sectors for growth Caution on certain sectors Market outlook Tired of too many ads? Remove Ads UBS Securities has laid out four compelling reasons for its bullish outlook on Indian equities, forecasting an 8% upside for the Nifty 50 index over the next 12 months. The brokerage pointed to a consumption-driven recovery, aided by fiscal stimulus , lower oil prices , and strong rural demand as major growth a favourable macro backdrop, the brokerage is particularly optimistic on sectors like financials, autos, and real estate, while remaining cautious on industrials and sees India's market set for growth due to a combination of factors. First, the brokerage said it expects a consumption -led recovery in FY26 and FY27, underpinned by a substantial Rs 7 trillion consumption stimulus—equivalent to around 2% of GDP. This stimulus, combined with resilient rural demand driven by favorable agricultural conditions and rising rural wages, is expected to drive consumption growth despite a slowdown in personal credit UBS noted that falling oil prices are expected to aid GDP growth by lowering inflationary pressures, providing a positive macroeconomic environment for Indian UBS said it believes India is better positioned than its Asian peers to weather the potential fallout from US tariffs and a global growth slowdown. The country's relatively insulated economy, coupled with lower crude oil prices, positions it advantageously in an uncertain global UBS points to attractive valuations , with the market's one-year forward price-to-earnings (PE) ratio aligning with the 7-8 year historical average, further supporting its bullish brokerage is particularly bullish on four sectors, which it believes will lead the charge in India's recovery:UBS said it expects banking credit growth to pick up, driven by improved system liquidity, a favorable interest rate environment, and regulatory FMCG, two-wheelers, and travel are seen as prime beneficiaries of the consumption recovery, fueled by government stimulus and strong rural improved consumer sentiment, UBS sees strong growth potential in the two-wheeler and passenger vehicle is positive on the real estate sector, benefiting from recovering demand and supportive macro conditions such as lower interest UBS is optimistic about these key sectors, the brokerage is cautious on industrials, IT, and generic pharma exporters. UBS noted that government capex growth is expected to remain muted, and global growth risks continue to impact the IT and pharma said it expects the Nifty 50 to reach 26,000 over the next year, supported by a recovery in consumption and favourable economic conditions. However, it also cautions that a global growth slowdown could result in a 6% downside to the these risks, UBS's overall outlook for Indian equities remains positive, with consumption, lower oil prices, and strong rural demand seen as key drivers for the market's read | Tale of 2 countries: Pakistan stock market down 4% post Pahalgam attack, India's Sensex gains 1.5% (Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
Time of India
06-05-2025
- Business
- Time of India
UBS finds 4 reasons to be bullish on Indian stocks, picks 4 fav sectors
Live Events UBS's top sectors for growth Caution on certain sectors Market outlook UBS Securities has laid out four compelling reasons for its bullish outlook on Indian equities, forecasting an 8% upside for the Nifty 50 index over the next 12 months. The brokerage pointed to a consumption-driven recovery, aided by fiscal stimulus , lower oil prices , and strong rural demand as major growth a favourable macro backdrop, the brokerage is particularly optimistic on sectors like financials, autos, and real estate, while remaining cautious on industrials and sees India's market set for growth due to a combination of factors. First, the brokerage said it expects a consumption-led recovery in FY26 and FY27, underpinned by a substantial Rs 7 trillion consumption stimulus—equivalent to around 2% of GDP. This stimulus, combined with resilient rural demand driven by favorable agricultural conditions and rising rural wages, is expected to drive consumption growth despite a slowdown in personal credit UBS noted that falling oil prices are expected to aid GDP growth by lowering inflationary pressures, providing a positive macroeconomic environment for Indian UBS said it believes India is better positioned than its Asian peers to weather the potential fallout from US tariffs and a global growth slowdown. The country's relatively insulated economy, coupled with lower crude oil prices, positions it advantageously in an uncertain global UBS points to attractive valuations , with the market's one-year forward price-to-earnings (PE) ratio aligning with the 7-8 year historical average, further supporting its bullish brokerage is particularly bullish on four sectors, which it believes will lead the charge in India's recovery:UBS said it expects banking credit growth to pick up, driven by improved system liquidity, a favorable interest rate environment, and regulatory FMCG, two-wheelers, and travel are seen as prime beneficiaries of the consumption recovery, fueled by government stimulus and strong rural improved consumer sentiment, UBS sees strong growth potential in the two-wheeler and passenger vehicle is positive on the real estate sector, benefiting from recovering demand and supportive macro conditions such as lower interest UBS is optimistic about these key sectors, the brokerage is cautious on industrials, IT, and generic pharma exporters. UBS noted that government capex growth is expected to remain muted, and global growth risks continue to impact the IT and pharma said it expects the Nifty 50 to reach 26,000 over the next year, supported by a recovery in consumption and favourable economic conditions. However, it also cautions that a global growth slowdown could result in a 6% downside to the these risks, UBS's overall outlook for Indian equities remains positive, with consumption, lower oil prices, and strong rural demand seen as key drivers for the market's read | Tale of 2 countries: Pakistan stock market down 4% post Pahalgam attack, India's Sensex gains 1.5% (Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
Malay Mail
22-04-2025
- Business
- Malay Mail
‘For our country': China's patriots are buying the dip
SHANGHAI, April 23 — Cao Mingjie had never traded stocks before Donald Trump's 'Liberation Day'. The home designer from China's southern Guangdong province changed his mind after April 2, when the US president announced 'reciprocal tariffs', intensifying a trade war with his country. Keen to show solidarity with Beijing, Cao decided he would invest 2,000 yuan (RM1,200) in the local stock market every month. 'The goal isn't to make money. It's about contributing to my country,' said Cao. He said he opened trading accounts after the higher tariffs hit Chinese stocks. In this trade war, 'every individual should stand by the country until the end'. Like Cao, many retail investors are joining the state-backed 'national team' to defend the stock market — another battlefield in the broadening Sino-US conflict, traders and brokers say. Buying has been focused on sectors set to benefit from China's national agenda, such as defence, consumer and semiconductors. The patriotic fervour is unusual in small investors, notorious for their casino mentality, and a welcome change for authorities seeking to counter the panic caused by the trade war and stabilise capital markets. Since the rout on April 4, China's share markets have received 45 billion yuan in net retail inflows, data from financial information provider Datayes shows. That compares with six straight sessions of outflows totalling 91.8 billion yuan ahead of Trump's 'Liberation Day'. Previously, private and state investors clashed during the 2015 market crash and in the aftermath of Beijing's crackdown of technology companies, undermining market rescue efforts. But now, their interests appear aligned as Trump threatens eye-popping import tariffs that China has described as 'bullying', even if some retail investors are merely opportunistic and riding on Beijing's swift and resolute intervention. As China stocks plunged 7 per cent on April 7, state-backed institutional investors publicly vowed to buy more shares, top Chinese brokerages pledged to steady prices, and a slew of listed companies unveiled share buyback plans. Last week, Chinese Premier Li Qiang urged government officials to strengthen efforts to steady the stock market. China's stock market has bounced 8 per cent from seven-month lows hit early April, and is down just 1.3 per cent so far this month. That compares with a slump of more than 8 per cent for US stocks. 'We think China's A-share market is of greater strategic importance,' said Meng Lei, China equity strategist at UBS Securities. Patriotic bets have 'meaningfully improved investor sentiment', Meng said. 'Being patriotic means holding on' Zhou Lifeng, from China's northwestern Ningxia region, has vowed to pour more cash into stocks even if he incurs losses. 'Being patriotic means holding on to your stocks,' said Zhou, a mountain climber. Zhou said he owns mostly consumer and defence stocks worth 3 million yuan and has 7 million yuan cash in his war chest. Restaurant operator Shu Hao said he had also invested several million yuan in Chinese shares and that he was inspired by efforts made by domestic retail giants to help exporters bruised by the trade war. Alibaba-owned Freshippo, and supermarket operators CR Vanguard and Yonghui Superstores have announced measures to help exporters pivot to the local market. 'People are expressing patriotism in various ways,' said Shu. He said he had bought technology and consumer shares. The stocks and sectors people are buying into reflects nationalistic pride. They are mostly areas in which Beijing has self-sufficiency targets or have local champions that are being shut out of global markets due to the tariffs. Reflecting this, consumer and chipmaking shares have risen since Trump's 'Liberation Day' despite weaker broader markets, while tourism and agriculture-related shares have recovered quickly. Exchange-traded funds, an increasingly popular investment conduit in China, have received piles of money. Since the April 7 slump, Chinese ETFs have received more than 230 billion yuan of flows, pushing the total size of the segment past 4 trillion yuan for the first time, state media has reported. The data does not show how much of those inflows were from retail investors, versus the 'national team'. 'War ... Without gun smoke' Patriotism is also reshaping the portfolio of some professional investors. Hedge fund manager Yang Tingwu said he ploughed all the cash left in his portfolio into stocks. 'This is war, only without gun smoke,' Yang, portfolio manager at Tongheng Investment said, referring to the spiralling trade conflict between China and the US that has seen tit-for-tat levies surging past 100 per cent. 'You're placing bets not just on your portfolio, but also on the fate of your country,' said Yang, who has wagered on farming, energy, finance and defence stocks. Founder of Shanghai-based Minority Asset Management, Liam Zhou, said he had invested his US$1 billion portfolio entirely in China stocks. The trade war has even turned some Chinese investors nationalistic. 'My portfolio is bleeding, but I don't care. I'll stand firm with the government in the fight against US bullying,' said Nancy Lu, a teacher in eastern Jiangsu province. She vowed to never go to Starbucks or wear Nike again, in a boycott of American brands. 'I won't sell a single stock. I'll help defend the market for our country. I have never felt so proud as a retail investor,' she added. — Reuters
