Markets Overreacting to Britain’s EU Vote, UBS China Head SaysDarren Boey
‘Wise to pause,’ Eugene Qian says in Bloomberg TV interview
UBS’s Qian calls Brexit vote result a ‘black swan’ event
Global markets are “overreacting” to the British vote to exit the European Union, UBS Group AG’s China head Eugene Qian said, as he called on clients to stay focused on their long-term investment strategies.
“It pays to pause a little bit” to think about what the right next step is, Qian said in an interview on Monday with Bloomberg Television’s Stephen Engle. “It’s wise to pause.”
Qian was speaking Monday on the sidelines of the World Economic Forum in the northern Chinese city of Tianjin as a rout in riskier assets continued from last week amid uncertainty over Britain’s future. The victory for Brexit, which Qian calls a “black swan” event, tore through world markets on Friday, pummeling the pound and high-yielding assets, with more than $2.5 trillion wiped from global equity values.
Qian said he’s expecting some Chinese companies to slow the pace of their investment in the U.K., given the potential for uncertainty in the country over the next couple of years. Still, over the longer term, a lot of the bank’s clients are still looking to developed markets like the U.K. and the EU, he said.
“Economically, a lot of Chinese companies still see the U.K. as a market where it does have a lot of potential to collaborate” with the mainland, Qian said.
UBS remains committed to its China strategy even amid the uncertainty over Brexit and softer global markets this year, he said. Chief Executive Officer Sergio Ermotti in January unveiled a plan to double the firm’s workforce in China to about 1,200 over the next five years as he seeks a slice of a financial-services market traditionally dominated by Chinese firms.
“No single event will change our long-term strategy for China,” Qian said. Over the medium to long term, there are “very promising prospects of local domestic market development, especially in wealth management, but also in the capital markets,” he said.