China Stocks Outlook Positive Over 12 Months, UBS’s Tang Says

June 14 (Bloomberg) -- John Tang, China strategist at UBS AG, said he’s positive on China equities in the next 12 months even as there’s still some “downside.” He spoke in Hong Kong with John Dawson on Bloomberg Television’s “First Up.”

On inflation:

“There’s still some downside on the stock market. On the one side, we are looking for potential bad numbers today and the next couple of days. On the other side I think June’s numbers may become uglier. People need to see the potential peak for inflation before they can become more comfortable to come back to the market. We are looking for the peak in June but no one knows until the time comes.”

On the 12-month outlook:

“For the 12 months from now, we are still positive on Chinese equities. Earnings are still quite defensive because of the non-cyclical nature of the H-share compound compared to A shares. On the other side, valuations look already quite attractive. This time the problem in China is not a demand problem. It’s a supply and disruption problem and more importantly, it’s a policy mistake. It’s relatively easy to correct. The headwind is still going to last for some time but on the other side we shouldn’t lose hope.”

On investment strategy:

“If you didn’t sell in May, in June it’s actually time to hold. In the current moment, after the market declined so much, you need to be a little bit positive and look at the positive side of it. It’s not a bear market. I’ll buy when other people are talking about the market and inflation seems able to peak.”

To contact Bloomberg News staff for this story: Zhang Shidong in Shanghai at

To contact the editor responsible for this story: Darren Boey at