8 December 2025 China Economic Comment Exports bounced - a mild positive surprise Exports returned to y/y growth again Exports grew by 5.9% y/y in November, a mild positive surprise compared to the 4.0% growth expected by Bloomberg consensus and a significant improvement versus the 1.1% contraction recorded in October. On a seasonally adjusted basis, we estimate the export level expanded by 2.2% over the month. Export momentum (%3m/3m) also ticked up slightly, after moderating for six months. In real terms, ...

Key Points - Hong Kong's share sales surged to over $73 billion, making it the top fundraising location in Asia for the first time since 2013, ranking just behind the US globally [1][26] - The increase in share sales is attributed to significant deals by Chinese companies, including a $5.3 billion listing by battery maker Contemporary Amperex Technology and over $5 billion raised by BYD Co. and Xiaomi Corp. [2][26] - The IPO pipeline in Hong Kong remains robust, with around 300 companies waiting to list, indicating a strong deal-making environment [6][26] - Investor sentiment is shifting towards greater discipline regarding valuations and fundamentals following a strong year, with a focus on high-quality deals in innovation and advanced manufacturing [7][26] - The Hong Kong market has benefited from China's ambitions in artificial intelligence and biotechnology, as well as efforts to boost domestic demand [9][26] - Heavyweight IPO candidates expected next year include Syngenta Group and A.S. Watson Group, alongside potential listings from China's AI sector [11][26] - Hong Kong listings have generated an average return of nearly 50% this year, outperforming the Hang Seng Index, which has gained 29.5% [15][26] - In India, IPOs reached a record of over $20 billion, driven by domestic mutual funds and retail investors, with significant deals expected in the coming year [18][26] - Concerns about high valuations persist, as approximately half of the companies that listed in India this year are trading below their debut prices [21][26] - Retail investors in mainland China are showing strong interest in IPOs of chipmakers, aligning with the government's goal of technological self-sufficiency [24][26] - The overall issuance volume in Hong Kong is expected to remain strong in the first half of next year, although geopolitical factors may impact future fundraising [25][26]

Group 1 - The global stock market has shown strong performance in 2025, driven by the AI investment boom and loose monetary policies, with many indices, including the US stock market, reaching historical highs [1] - Billionaires are optimistic about investment opportunities in China and Western Europe, with 40% of respondents favoring Western Europe for the next 12 months, up from 18% in 2024, and 34% favoring the Greater China market, significantly higher than 11% last year [5] - Over a five-year outlook, the percentage of respondents optimistic about the Greater China market rose from 31% in 2024 to 48% in 2025 [6] Group 2 - There has been a significant decline in optimism regarding the North American market, with only 63% of billionaires favoring it in 2025, down from 80% in 2024, primarily due to concerns over multiple risk factors, particularly tariffs [9] - 66% of respondents identified tariffs as the most likely negative factor affecting the market environment in the next 12 months, followed by geopolitical conflicts (63%), policy uncertainty (59%), and higher inflation (44%) [9] - Billionaires plan to increase investments in private equity, hedge funds, developed market equities, and emerging market equities, with 49% intending to increase exposure to private equity in the next 12 months, followed by hedge funds (43%), developed market equities (43%), and emerging market equities (42%) [11]

Core Insights - The global stock market has shown strong performance in 2025, driven by the AI investment boom and loose monetary policies, with many indices, including US stocks, reaching historical highs [2] - Billionaires are optimistic about investment opportunities in China and Western Europe, with 40% of respondents favoring Western Europe and 34% favoring Greater China for the next 12 months, significantly up from 18% and 11% respectively in 2024 [2] - Over a five-year horizon, the outlook for Greater China has also improved, with the percentage of respondents expecting positive investment opportunities rising from 31% in 2024 to 48% in 2025 [2] North America Market Sentiment - There has been a significant decline in optimism regarding the North American market, with only 63% of billionaires favoring it in 2025, down from 80% in 2024 [4] - Concerns over multiple risk factors, particularly tariffs, have influenced this shift, with 66% of respondents identifying tariffs as a major potential negative impact on the market environment [4] - Other concerns include geopolitical conflicts (63%), policy uncertainty (59%), and higher inflation (44%) [4] Investment Preferences - Billionaires plan to increase their investments in private equity, hedge funds, developed market equities, and emerging market equities over the next 12 months, with 49% indicating plans to increase exposure to private equity [4] - The survey indicates that 43% of respondents plan to increase investments in hedge funds and developed market equities, while 42% are looking to invest more in emerging market equities [4] Regional Investment Trends - The UBS Billionaire Survey 2025 highlights varying investment preferences across regions, with significant interest in private equity and hedge funds in the Americas and EMEA [5] - In the Asia-Pacific region, 61% of billionaires plan to increase their exposure to hedge funds, indicating a strong regional preference for alternative investments [5]

Let's bring in UBS alignment partners managing director Alli McCartney who's here at Post9. It's great to have you back Ally. I mean people did point out we were able to get to all-time highs without the benefit of AI yesterday.And can that broadening continue. >> So when you think about what has happened this year, what 2025 has done. There are three stocks Broadcom being one of them that have done more than any other in terms of contribution to the bottom line.So you have 73 stocks that are sort of AI lev ...

Economic Outlook - UBS predicts a "moderate growth and inflation pressure" scenario for the US economy from 2026 to 2028, with GDP growth rates expected to be 1.6% in 2026 and 1.8% in 2027, indicating a gradual slowdown in economic expansion [1][3] - The current economic expansion is characterized by "narrow momentum" and "unstable foundations," with sectors like residential investment and non-residential construction already in decline [1][3] Inflation and Tariff Impact - Inflation pressure is identified as a core challenge, significantly driven by tariff policies, with the current average tariff rate at 13.6%, which has surged fivefold since the beginning of the year [1][3] - UBS estimates that tariffs will increase the core Personal Consumption Expenditures (PCE) inflation rate by 0.8 percentage points in 2026, maintaining a price increase around 3.5% even if other inflationary pressures ease [1][3] Labor Market Dynamics - The labor market is showing signs of cooling, with a risk of transitioning from "moderate slowdown" to "accelerated weakness," which poses a significant uncertainty for future economic performance [1][3] - Despite a gradual decline in job growth, the labor market remains resilient, but households outside the top 20% income bracket are experiencing a significant drop in liquidity, affecting their ability to cope with inflation [2][3] Policy and Technological Support - Policy adjustments, including potential interest rate cuts by the Federal Reserve in late 2026, and technological advancements, particularly in AI, are expected to support economic stability and growth [2][3] - The "One Big Beautiful Bill Act" (OBBBA) is anticipated to provide economic stimulus through tax reductions and corporate expense deductions, partially offsetting the deficit increase from tariff revenues [2][3] Market Strategy - UBS maintains an overweight stance on the US stock market, expecting it to navigate short-term economic headwinds while focusing on AI-driven profit corrections and policy support [2][3] - High-quality stocks are projected to continue driving strong earnings, with a weaker dollar providing additional advantages compared to European markets [2][3]

Our next guest is pretty bullish on the regionals for 2026. Erica Ngerian, UBS senior equity research analyst focusing on the large cap banks joins us this morning. Erica, happy Friday.Good to see you. >> Good to see you. >> I was going to ask you whether or not the environment can get any better, but I think you probably think it can.>> Look, I mean, especially for the regional banks, right. They have really suffered from all of the market share loss and direct lending to the non-banks. And last Friday, th ...

REACHING $100,000 A YEAR IN SOME PLACES. MORE PEOPLE ARE QUESTIONING THE VALUE OF THAT HIGHER EDUCATION. UBS SHARES ARE HITTING A 17 YEAR HIGH AFTER GROUP OF INFLUENTIAL SWISS LAWMAKERS PROPOSED WATERING DOWN THE CAPITAL REQUIREMENTS FOR THE BANK.THE PROPOSAL WOULD ALLOW UBS TO USE JUNIOR DEBT, SO-CALLED AT-1 BONDS. I WANT TO BRING IN OUR CHIEF WALL STREET CORRESPONDED AT THE DESK. THIS IS AN IMPORTANT STORY ON SO MANY LEVELS, ESPECIALLY FOR OUR VIEWERS AND CLIENTS.IT MEANS UBS PROBABLY WILL NOT MOVE TO NEW ...

Group 1 - UBS shares have reached a 17-year high, driven by a proposal from influential Swiss lawmakers to relax capital requirements, allowing UBS to utilize junior debt known as AT-1 bonds [1][4] - The Swiss government previously required UBS to set aside $26 billion in additional capital to ensure a safer banking system, which UBS deemed unacceptable as it would hinder competitiveness [3][4] - There has been speculation about UBS potentially relocating its headquarters out of Switzerland, which would significantly impact the Swiss banking landscape, as UBS is the last major global bank in the country [2] Group 2 - The investment banking sector is experiencing a resurgence in deal-making activity, contributing to a positive outlook for major banks, despite concerns about the broader economy [4][5] - Major banks are reporting resilient operations and a strong pipeline of deals, indicating a healthy investment banking environment [5][6] - There is a discussion about whether there is a bubble in bank stocks, but the current sentiment suggests that the banking sector does not exhibit obvious signs of being in bubble territory [6][8]

Core Viewpoint - The stock reached its highest level in 17 years following legislative proposals to reduce capital requirements for Swiss banks [1] Group 1 - The proposed reduction in capital requirements is expected to positively impact the financial stability and profitability of Swiss banks [1] - The stock performance indicates strong investor confidence in the banking sector's future prospects due to regulatory changes [1]