UBS Expects MSCI China to Finish 2025 with a 5-6% Increase

Foreks - UBS Research indicates that Chinese stocks may experience a volatile trajectory with a potential decline of 5% by the end of the first quarter of 2025, pointing to factors such as potential U.S. trade tariffs, political uncertainty, likely stagnation of retail entries, and delays in domestic policy support.

James Wang, the head of China's strategy at UBS, stated that negative uncertainties could exert some downward pressure on stock prices in the short term. However, given that companies listed in China are predominantly focused on the domestic economy, UBS expects a combination of corporate governance reforms, internal policy responses, and a low base effect to drive the market to finish the year in positive territory.

Wang remarked, "We anticipate that MSCI China will close 2025 with a 5-6% stock price return and believe any pullback will provide a more attractive entry point for investors."