Developed countries’ GDP returns to pre-pandemic
Central banks stay accommodative but start reducing asset purchases in 2H 2021 as the recovery beats expectations
Discretionary fiscal impulse continues support the economy
Lower real rates and a weaker dollar boost global growth over the next 12 months
Vaccine rollout accelerates with sufficient vaccinations done by 1Q, allowing for an earlier lifting of economic restrictions
A partial rollback of existing trade tariffs raises global growth
Developed countries’ GDP returns to pre-pandemic levels in 2022
Central banks stay accommodative
Real rates remain low and stable over the next 12 months
Fiscal impulse fades moderately and gradually as governments adapt to economic recovery
Despite recurring outbreaks, public fear is limited, and there are sufficient vaccinations for restrictions to fade sustainably
The US takes a more multilateral and predictable approach to trade policy
Developed countries’ GDP returns to pre-pandemic levels in 2023 or later
Diminishing fiscal impulse unable to compensate for economic weakness
Monetary policy remains supportive, but higher inflation raises market concerns about earlier than expected tightening
Vaccine availability is delayed, or mutations reduce their efficacy substantially
Heightened public fear of COVID-19 and strict restrictions on business activity keep recurring throughout 2021
Growth is hurt by renewed US-EU-China trade tensions
An asset price bubble inflates and bursts.
UBS House View Monthly
Investing in Asia Pacific monthly guide
Year Ahead 2021: A Year of Renewal
Baidu Sp ADR-A (USD, BIDU US)
Price target: 315 (Inception date: 21/01/2021)
UBS IB has just raised Baidu’s PT to $315, based on solid 4Q20 earnings estimates. Baidu also has a pipeline of new businesses, including its recently announced JV with Geely on autonomous vehicles. Baidu is a major laggard amongst China internet giants with its PER trailing at a ~20% discount while forward PE remains at the low end of peers,. Baidu’s application for a secondary listing in Hong Kong also acts as a near term catalyst, as secondary listings historically lead to a run-up in prices (e.g. Alibaba, JD.com, Netease etc.).
China Life Ins -H- (HKD, 2628 HK)
Price target: 20.9(Inception date: 18/01/2021)
We expect 13% NBV (new business value) growth for China Life in 2021E, with stabilization on COVID impact. The reform agenda likely provides benefits to government-owned insurers like China Life. Despite competition from internet players, limitations of mutual life insurance remain and traditional insurers including China Life are unlikely to be significantly affected. Trading at 0.5x 2021E P/EV (embedded value), China Life's share price underperformed sector by 17% since Q420. We believe current valuation has not reflected much NBV growth recovery in 2021E but has reflected much disruption from Internet competition.
Funds highlights (as at end Jan 2021)
UBS (Lux) Credit Income Opportunities Fund (USD LU2249781621)
Hunt for yield with a taste of Asia
CIO expects bond yields to stay at very low levels for the foreseeable future. While opportunities in the US and EUR credit markets are limited, credit markets in Asia still offer attractive yield potential. Further, for investors with existing bond holdings, such a strategy as a building block could help to enhance the risk-adjusted return for a holistic portfolio according to CIO
- Diversification across geography, sub-asset class and issuer to mitigate risks such as liquidity and defaults
- Provides access to newly opened up onshore China market
- Experienced team with extensive expertise drawing on local presence and knowledge of sector specialist teams located in Asia, onshore China, the US and Europe that other managers may not have access to
BGF Next Generation Technology Fund (USD LU2278360750)
Investing in innovation for the next decade
If the last decade was about investing in the technology sector itself, CIO thnks the next decade will reward investing n the disruptors in sectors undergoing technological transformation.
- Portfolios today are often exposed to the largest names in the technology universe, despite the fact that disruption and hyper growth often comes from lesser known companies usually those on the cusp of innovation breakthrough
- The fund has a 5.4 % overlap with the MSCI ACWI Information Technology Index, showing a differentiated and targeted approach to investing in emerging and disruptive technology names
- Lead PM has more than 25 years of experience in the technology sector. The Team’s vast network in Silicon Valley grants them access to emerging and established technology companies, both in the public and private markets
JPM China Fund (USD LU0129472758)
CIO overweight in China Equity
CIO has upgraded Chinese equities to most preferred due the markets’ recent underperformance, solid earnings outlook and strong macro fundamentals. Our CIO expects the market to regain its strength in the months ahead and therefore sees now a buying opportunity.
- A “Best Ideas” portfolio of 50–70 China stocks that leverages the comprehensive Greater China research team of JPMorgan Asset Management and Consumer experience.
- Off-benchmark allocation to Chinese onshore A-shares can go up to 40% of the portfolio
- Growth oriented fund that focuses on businesses with sustainably high returns
FX structured products highlights
Top trades of the week (as at 23 Feb 2021)
UBS Quotes keeps you up to date with the latest market activity and exclusive data and research on market developments. Visit www.ubs.com/quotes or log into Digital Banking.
To sign up for Digital Banking, call the Digital Banking Hotline (Singapore +65 6495 8333, Hong Kong +852 2971 7111). Monday - Friday: 7am - 8pm, Saturday: 9am - 5pm
Past performance is no indication of future performance. *since inception
The contents of this document have not been reviewed by any regulatory authority in Hong Kong or Singapore. This advertisement has not been reviewed by the Monetary Authority of Singapore. This advertisement has not been reviewed by the Securities and Futures Commission of Hong Kong. Investors are advised to exercise caution in relation to any offer. If an Investor is in any doubt about any of the contents of this document, the Investor should obtain independent professional advice.
This document is communicated by UBS AG and/or its affiliates ("UBS") for the exclusive use of the party to whom UBS delivers this document. UBS may from time to time, as principal or agent, have positions in, or may buy or sell, or make a market in any securities, currencies, financial instruments or other assets underlying the transaction to which any term sheet, Information Memorandum, Prospectus, confirmation or other documentation for the issue of the product or to which the transaction relates (collectively, the "Documentation"). UBS may provide investment banking and other services to, or have officers who serve as directors of the companies referred to in the Documentation. UBS may pay or receive fees in connection with transactions of securities to or from third parties. Further information on any discount to the issue price provided by UBS Investment Bank division to UBS Wealth Management division is available in the pricing schedule or other similar document which may be provided by UBS Wealth Management division from time to time. UBS has policies and procedures designed to minimize the risk that officers and employees are influenced by any conflicting interest or duty and that confidential information is improperly disclosed or made available. The investor acknowledges that UBS may retain all or part of such fees.
UBS generally hedges its exposure under structured transactions, although it may elect not to hedge or to partially hedge any transaction. UBS’ hedging activity may be conducted through transactions in the underlying asset, index or instrument or in options, futures or other derivatives related to the underlying asset, index or instrument on publicly traded markets or otherwise, and may have an impact on the price of the underlying asset. If a transaction is cash settled, UBS will generally unwind or offset any hedge it has for such transaction in close proximity to the relevant valuation time or period. In some cases, this activity may affect the value of the transaction.
Prospective investors should be aware that receipt of any payment (whether coupon payment, redemption amount or otherwise) or any securities by an investor in connection with the transaction is subject to the credit risk of the issuer of the securities (the "Issuer") or counterparty to the transaction (the "Counterparty"). Investors assume the risk that the Issuer or Counterparty will not be able to satisfy its obligations under the transaction. Except where specifically provided otherwise, the Issuer's or the Counterparty's obligations under the transaction will constitute general and unsecured contractual obligations of the Issuer or Counterparty, respectively, and such obligations will rank equally with all other unsecured contractual obligations of the Issuer or Counterparty, respectively, and any subsequent unsecured obligations of the Issuer or Counterparty, respectively. In the case of an insolvency of the Issuer or Counterparty, preferred liabilities of the Issuer or Counterparty, respectively, will have priority over unsecured obligations such as the transaction.
Any credit rating of the Issuer or the Counterparty stated in the Documentation reflects the independent opinion of the referenced rating agency as to the creditworthiness of the rated entity but is not a guarantee of credit quality of the Issuer or the Counterparty. Any downgrading of the credit ratings of the Issuer or Counterparty or their respective affiliates, by any rating agency could result in a reduction in the value of the product.
Structured transactions are complex and may involve a high risk of loss. Prior to entering into a transaction you should consult with your own independent legal, regulatory, tax, financial and accounting advisors to the extent you consider it necessary, and make your own investment, hedging and trading decisions (including decisions regarding the suitability of this transaction) based upon your own judgment and advice from those advisers you consider necessary. Save as otherwise expressly agreed, UBS is not acting as your financial adviser or fiduciary in any transaction.
This document is for information purposes only and has no regard to the specific investment objectives, financial situations or particular needs of any specific recipient. Any charts and scenarios are for illustrative purposes only. Historical performance is no guarantee for and is not an indication of future performance. The information herein is not intended to be a complete statement or summary of the developments referred to in this document. No representation or warranty is provided in relation to any information herein which is derived from independent sources.
The analysis contained herein is based on numerous assumptions. Different assumptions could result in materially different results. The information and any opinions expressed in this document are subject to change without notice and may differ or be contrary to opinions expressed by other business areas or groups of UBS as a result of using different assumptions and criteria. UBS is under no obligation to update or keep current the information contained in this document.
This document does not constitute and should not be construed as an offer, recommendation or solicitation to conclude a transaction nor should it be treated as an investment advice. The terms of the transaction will be exclusively subject to the detailed provisions, including any risk considerations, contained in the Documentation. Any investment or any other decisions should not be made based solely on this material. Neither UBS AG nor any of its affiliates, directors, employees or agents accepts any liability for any loss or damage arising out of the use of all or any part of this material.
UBS specifically prohibits the redistribution or reproduction of this document and any of the material in this document in whole or in part without the prior written permission of UBS and UBS accepts no liability whatsoever for the actions of third parties in this respect.
No action has been or will be taken in any jurisdiction that would permit a public offering of the securities described in this document, save where explicitly stated in the Documentation. Where applicable, the securities must be sold in accordance with all applicable selling restrictions in the jurisdictions in which they are sold.
Not for distribution in the United States or to U.S. persons
This document and any attachment(s) contained herein is merely a generic description of the product and is for information purposes only. It should be read in conjunction with the respective product documentation (including term sheet) for a fuller disclosure of relevant features and risk considerations. All terms and conditions are provided as examples and actual terms may vary. Individual products launched may come with variation to the basic structure. The final terms and conditions will be finalized on the pricing date. Charts and scenarios are for illustrative purposes only. Historical performance is no guarantee for and is not an indication of future performance. This document does not constitute and should not be construed as an offer, recommendation or solicitation to conclude a transaction nor should it be treated as an investment advice. Please refer to the important disclaimers herein and in the attachment(s) (if any).
Please be informed that e-mail can involve substantial risks e.g. lack of confidentiality, potential manipulation of contents and/or sender's address, incorrect recipient (misdirection), viruses etc. You should recognize that electronic mail may be stored and forwarded through several computer systems, and it is possible that someone may (illegally) read your e-mail and disclose it to someone. UBS assumes no responsibility for any loss or damage resulting from the use of e-mails. UBS recommends in particular that you do not send any sensitive information, that you do not include details of the previous message in any reply, and that you enter e-mail address(es) manually every time you write an e-mail.
This communication is issued by UBS AG or an affiliate thereof ("UBS") and is intended for the recipient only and is not for further distribution without the consent of UBS. To the extent permitted by law, UBS does not accept any liability arising from the use of this communication.
If you would like to cease receiving such materials by e-mail but wish to continue receiving such materials by post, please reply to the sender by e-mail. If you would like to cease receiving all materials or have any requests in relation to such materials, please contact your UBS representative.
UBS reserves the right to retain all messages. Messages are protected and accessed only in legally justified cases.
Privacy statements: http://www.ubs.com/global/en/legalinfo2/privacy.html
© UBS 2020 All rights reserved
UBS AG Hong Kong Branch, incorporated in Switzerland with limited liability
- This product is not listed on any stock exchange and is not covered by the Investor Compensation Fund established under the SFO in Hong Kong.
- Unless specifically stated, this product is not secured by any of the Issuer's assets or any collateral. The product constitutes general unsecured obligations of the Issuer and no other person. An investor in this product is subject to the credit and default risk of the Issuer.
- For explanations of credit ratings that may be mentioned in this document, you can refer to the relevant Rating Agencies' websites. A credit rating (i) is not a recommendation, (ii) is not necessarily an indication of liquidity or volatility, and (iii) may be downgraded if the credit quality of the relevant entity or asset or obligation declines.
- The return of the product may increase or decrease as a result of currency fluctuations
UBS does not provide any tax advice for investment products. Tax treatment depends on the individual circumstances of each client and clients must therefore seek their own tax advice from a reputable service provider.
This product description is for information purposes only. The final terms and conditions will be finalized on the pricing date. For detailed information about the terms and conditions please consult the termsheet provided by the Issuer in English only.
This product is a structured product i.e. a combination of two or more financial instruments of which at least one is a derivative. For more information on "structured products" please refer to the brochure "Special Risks in Securities Trading - Asian Version". Additional information on UBS Structured Products in general, the various product families as well as risks and opportunities can be found in designated UBS brochures.
Please note that the above is merely a generic description of the product and the individual products launched may come with variations to the basic structure. In addition, the individual client suitability has not been considered. Please contact your client advisor if your require further clarifications or tailored advice.
Any offering material term sheet, research report, other product or service documentation or any other information (the "Material") made available was done so as a result of a request received by UBS from you and/or persons entitled to make the request on your behalf. The Material, where provided, was provided for your information only and is not to be further distributed in whole or in part in or into your jurisdiction without the consent of UBS. The Material may not have been reviewed, approved, disapproved or endorsed by any financial or regulatory authority in your jurisdiction. UBS has not, by virtue of the Material, made available, issued any invitation to subscribe for or to purchase any investment (including securities or products or futures contracts). The Material is neither an offer nor a solicitation to enter into any transaction or contract (including future contracts) nor is it an offer to buy or to sell any securities or products. The relevant investments will be subject to restrictions and obligations on transfer as set forth in the Material, and by receiving the Material you undertake to comply fully with such restrictions and obligations. You should carefully study and ensure that you understand and exercise due care and discretion in considering your investment objective, risk appetite and personal circumstances against the risk of the investment. You are advised to seek independent professional advice in case of doubt.
Any and all advice provided on and/or trades executed by UBS pursuant to the Material will only have been provided upon your specific request or executed upon your specific instructions, as the case may be, and may be deemed as such by UBS and you.
Any offering material, term sheet, research report, other product or service documentation or any other information (the "Material") made available was done so as a result of a request received by UBS from you and/or persons entitled to make the request on your behalf. The Material, where provided, was provided for your information only and is not to be further distributed in whole or in part in or into your jurisdiction without the consent of UBS. The Material may not have been reviewed, approved, disapproved or endorsed by any financial or regulatory authority in your jurisdiction. UBS has not, by virtue of the Material, made available, issued any invitation to subscribe for or to purchase any investment (including securities or derivatives products). The Material is neither an offer nor a solicitation to enter into any transaction or contract (including future contracts) nor is it an offer to buy or to sell any securities or derivatives products. The relevant investments will be subject to restrictions and obligations on transfer as set forth in the Material, and by receiving the Material you undertake to comply fully with such restrictions and obligations. You should carefully study and ensure that you understand and exercise due care and discretion in considering your investment objective, risk appetite and personal circumstances against the risk of the investment. You are advised to seek independent professional advice in case of doubt.
Any and all advice provided and/or trades executed by UBS pursuant to the Material will only have been provided upon your specific request or executed upon your specific instructions, as the case may be, and may be deemed as such by UBS and you.
- Confirm that I meet the requirements to qualify as:
- a "Professional Investor” in accordance with Section 1 of Part 1 of Schedule 1 of the Securities and Futures Ordinance (Cap 571 of the Law of Hong Kong) and as a “Private Banking Customer” as defined in the circular issued by the Hong Kong Monetary Authority on 12 June 2012; and/ or
- an "accredited investor" or "institutional investor" as defined in the Securities and Futures Act (Chapter 289) of Singapore
Content provided on “as is” and “as available” basis
- Confirm my understanding that the materials, information or reports published, distributed or otherwise made available on the UBS Website
(a) are published for information purposes only and are subject to change at any time without notice;
(b) have been created without any regard to the specific investment objectives, financial situation or particular needs of any specific recipient and should not be construed as a solicitation, offer or recommendation or advice to buy or sell any securities, investment or other financial instruments, to effect any transactions or to conclude any legal act of any kind whatsoever.