JB TRACKER CERTIFICATE ON THE UNDERVALUED HONG KONG LISTED SHARES BASKET
President Trump’s statement on imposing tariffs on Chinese imports valued at USD 200 billion at a 10% tax rate lead to a selloff in the Chinese stock markets, given that it could lead to a deterioration in exports overall.
While Julius Baer’s Research base case view is that the US-China trade spat will not lead to a full blown trade war, the next steps are hard to predict ant its contagion effect is difficult to quantify – but according to economists it could result in a drop of Chinese GDP growth by as much as two percentage points next year.
However, September economic data, to be released in the first two weeks of October, should validate that trade fears will not cause an economic hard landing. Between now and then, the market can be expected to be volatile. But it is already so inexpensive that it is worth holding through that period.
Therefore, Julius Baer recommends investors gain exposure to China’s undervalued stocks by investing in selected H-shares via the JB Tracker Certificate on the Undervalued H-Shares Basket.