The National Development and Reform Commission held a press conference yesterday (8th) to announce a series of incremental policies. UBS Wealth Management Asia Pacific Investment Office stated that the NDRC reiterated its confidence in economic growth, but to the slight disappointment of market investors with higher expectations, no additional new stimulus policies were introduced at the meeting.

The bank believes that the Chinese government may reveal more explicit fiscal support measures at a senior-level meeting later this month. Until then, the bank expects market volatility to potentially intensify. Therefore, it continues to be bullish on using a barbell strategy for the Chinese market. Investors underweight in Chinese stocks may consider increasing exposure to selected internet and consumer industry companies at low points. From a defensive perspective, it remains bullish on high-yield enterprises in finance, utilities, energy, and telecommunications sectors, especially state-owned enterprises benefiting from capital management reforms.