Market adjustments ‘setting scene for next decades’ : UBS CEO
The volatility witnessed in Chinese stock markets last week needs to be seen in the context of broader market adjustments which will continue throughout this year, the CEO of Swiss investment bank UBS has said.
Sergio Ermotti told Class CNBC on Wednesday that 2016, for China and for the rest of the world, is a "year of adjustment. And those adjustments are now playing out."
"I think they are setting the scenes for the next decades," the chief executive added.
Chinese markets plunged during the first trading week of 2016 amid concerns over an economic slowdown in the country. The sharp falls triggered circuit breakers which halted trade. In total last Thursday, China shares only traded for around 15 minutes. Markets in Europe and the United States sold off heavily on the news which rattled investors' nerves.
It was not the first time turmoil gripped China's equity market. Last August, Shanghai stocks nose-dived 8.5 percent in one day, and there were many more days of bumpy trade.
"China is just a continuation of what we saw at the end of 2015," Ermotti said.
He believed UBS was well positioned to weather the storm.
"We have seen already a lot of volatility and uncertainty in the last few years. We have been repositioning our business in this direction and we do think that we are ready to take the challenges but also the opportunities that 2016 offers," he said.
As Chinese people grow increasingly wealthy, the bank is looking to expand its activities in China in asset management, investment banking and particularly in wealth management.