UBS' Helin: Improved Sentiment of Foreign Funds, Incremental Capital to be Expected

The level of attention from international capital to the Chinese market has significantly rebounded. Last year, the underweight allocation of overseas investors to the Chinese market narrowed from about 2.5% to about 1.3%, reducing the underweight by about 1.2 percentage points. He Liyan, head of the global financial markets trading department at UBS, recently said in an interview with the China Securities Journal, "If foreign funds further reduce their underweight allocation, it will mean a substantial potential inflow of funds." He Liyan said that foreign sentiment is shifting from a cautious attitude to "cautious optimism." In his view, the valuation advantage of the Chinese market is highlighted, corporate governance continues to improve, and the momentum of technological innovation is continuously strengthening, combined with the increasing demand for diversified allocations by global investors, the entry window for allocation funds is expected to gradually open. UBS expects that the Chinese stock market will rise by about 18% for the full year 2026, with profit growth of about 10%. The technology innovation sectors such as robotics, artificial intelligence, new energy vehicles, and biotechnology are the most popular.