UBS expects the MSCI China Index to outperform the global market by 5% this year

Credit Suisse Global Markets China Head Fang Dongming said that if the Middle East conflict is contained within the next two to three weeks, the global economy and stock market momentum could recover to early-year levels. However, if the conflict persists longer, investors will become more cautious, and economists and strategists will reassess their forecasts for the global economy and stock markets this year.

Credit Suisse maintains its target of 100 points for the MSCI China Index by the end of this year, about 20% higher than the current level. Fang Dongming mentioned that China has a lower dependence on imported oil, and Chinese assets are more resilient to risks, so Chinese assets are expected to play a more significant role in investors’ diversified global portfolios.

Although it is still early, there is no data yet showing a clear shift of funds into Hong Kong and Chinese stocks after the outbreak of the Middle East conflict. He expects the MSCI China Index to outperform the global market by 5% this year.

China-U.S. trade negotiations are ongoing. When asked whether China-U.S. relations remain a concern preventing global investors from heavily deploying Chinese stocks, Fang Dongming pointed out that China-U.S. relations are no longer a major factor. The previous attitude of investors towards “Anything but China” has also changed.

Fang Dongming further stated that investors understand that competition between China and the U.S. will persist long-term, so they will choose to invest in both markets. The only question is which side they lean toward. He also believes that, with high oil prices, more stable China-U.S. relations will benefit U.S. economic growth.