UBS's Blessing sees impact of trade tensions in China
By Brenna Hughes Neghaiwi and Angelika Gruber
ZURICH, Sept 11 (Reuters) - UBS is seeing the
impact of a global trade war in Asia, where geopolitical jitters
are prompting investors to trade less, Wealth Management
Co-President Martin Blessing told Reuters on Tuesday.
Growing trade tensions have especially weighed on business
in China, where investor worries have seen Chinese equities fall
this year, the Swiss-based co-head of the world's largest wealth
manager said in an interview.
"The U.S. is still going very strong, while the Chinese
stock market is quite down this year if you look at the Shanghai
index," Blessing said. "Investors in Asia see more negative
impact of the trade debate and are more worried about it."
Falling markets tend to lead to less trading as clients
become more risk averse, and also reduce the net interest income
and fees the bank is able to generate as investment volumes and
deposits go down.
"When markets are going down people tend to trade less – not
more," Blessing said. "We are clearly closer to the end of the
cycle than the beginning."
The bank believes the trade war debates will extend beyond
U.S. mid-term elections in November, Blessing warned, so
tensions and the global economic impact may yet rise.
The bank, however, takes a mid- to long-term view in
determining investment allocations, as opposed to reacting to
rapidly shifting discussions which have a short-term impact.
Blessing took over UBS's international wealth management
business, offering private banking to millionaires and
billionaires outside North America, in January, the same month
it announced it would merge its two regional divisions into one
He had led the global business jointly with his U.S.-based
counterpart Tom Naratil since February.
Over the past three years, the bank's net new money growth
of 2.1 to 2.2 percent has fallen at the lower end of the 2-4
percent target for 2018 to 2020 instated earlier this year.
Its non-U.S. wealth management unit had previously targeted
growth of 3-5 percent, while its Wealth Management Americas unit
had targeted 2-4 percent growth.
It will provide an investor update in London on Oct. 25.
(Reporting by Brenna Hughes Neghaiwi and Angelika Gruber;
Editing by Michael Shields)
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