We Are Short-Term Cautious on Chinese Equities: UBS’s Liu

The video discusses the implications of the PBOC's policy changes on the yuan and broader Chinese assets. It highlights the market's interpretation of the yuan's appreciation and the PBOC's actions. The discussion then shifts to investment strategies for Chinese equities, considering US-China tensions and the upcoming US presidential election. The video also analyzes the Chinese banking sector, emphasizing the need for revenue adjustments. Finally, it explores the potential in the Chinese telecom sector, noting improved revenue and pricing but a lack of interest due to past disappointments.

What was the PBOC's recent policy change regarding the yuan?

• Banning short selling of the yuan

• Fixing the yuan exchange rate

• Reducing reserve requirements for FX derivatives

• Increasing reserve requirements for FX derivatives

How did the PBOC's actions in September 2017 affect the CNY USD exchange rate?

• It caused a long-term depreciation

• It led to a temporary pause in appreciation

• It had no effect on the exchange rate

• It resulted in immediate appreciation

Which sectors are being underweighted due to US-China tensions?

• Chinese telcos and banks

• Healthcare and education

• Renewables and consumption

• Tech hardware and US-listed ADRs

Why is there a lack of interest in the Chinese banking sector despite its cheap valuation?

• Strong competition from foreign banks

• Excessive government intervention

• Lack of revenue right-sizing

• High interest rates

What is the current market sentiment towards Chinese telcos?

• Out of favor despite improving revenue

• Highly favorable due to strong growth

• Neutral with no significant changes

• Negative due to declining pricing