UBS cuts China stock forecast amid Trump tariff threat, weak stimulus
Swiss money manager cuts mid-2025 and end-2025 targets for MSCI China Index because of tariff uncertainties and disappointing stimulus
UBS Global Wealth Management, one of the world’s largest wealth managers, has cut its forecast for Chinese stocks amid threats of additional US tariffs and weaker-than-expected stimulus.
The Swiss money manager downgraded its mid-2025 target for the MSCI China Index, which tracks 700-odd Chinese stocks traded onshore and abroad, to 67 from 76, and its end-2025 target to 74 from 79, citing “tariff-induced volatility and stimulus disappointments,” according to a report released on Monday.
“Taken together, the outcomes are relatively disappointing for global investors hoping for a more aggressive Chinese stimulus response to Trump’s impending return,” the report said.
UBS Global Wealth Management, which manages US$4.3 trillion of assets, is the first among its peers to cut its outlook on Chinese stocks, as they continue to lose momentum following a rally that started in late September.
After a slew of measures from Beijing to boost the sluggish economy, the MSCI China Index rose from about 54 in mid-September to a multiple year peak at 76 in early October, only to fall back to 67 on Tuesday.
Donald Trump’s re-election as US president last week could lead to a 10 per cent to 20 per cent tariff on all imports and an additional 60 per cent on goods from China, which he pledged to do during his campaign. Trump has reportedly picked two China hawks, Marco Rubio and Mike Waltz, as his secretary of state and national security adviser, respectively.
