Euro-zone equities will offer lucrative opportunities for Chinese investors over the next six months due to their cheap valuations under the low interest rate environment, UBS Securities says. “Not only for Chinese investors, but also for global investors, euro-zone equities offer the best opportunities for asset allocation,” said Xu Jian, managing director for equity sales at UBS Securities. “Compared with the A-share market, valuations of stocks in the European markets are so much cheaper,” Xu said. The Shanghai Composite Index, a benchmark of the mainland’s stock market, rose by 43 per cent in the five months of this year. The weakness in euro-zone economies has taken a toll on the European stock markets over the past few months, while the growing uncertainty in the debt crisis in Greece has put further pressure on the markets. The low interest rate in the euro zone could allow investors to enjoy low financing costs, Xu said. “While the US is expected to start the rate hike, the euro zone has maintained loose monetary policy to inject more liquidity in the market,” he said. The weakness of the euro against other currencies was also making the region’s equities more attractive, Xu said. While Chinese investors, in particular high-net-worth individuals, were looking for more diversified options in allocating their assets, the complexity and risks in the European market could dampen their appetite, he said. “However, Chinese investors should diversify their investments in different regions and tools,” he said. Investment products via the qualified domestic institutional investors programme, which allows Chinese to invest abroad under certain quotas, had received warm responses from the retail investors, Xu added. Some simple investment products, such as exchange-traded funds (ETFs) that listed in the European markets, would be better options for Chinese investors who were starting to increase their overseas portfolios, Xu said. Nicolas Bertrand, head of equities and derivatives for the London Stock Exchange, agreed that ETFs allowed Chinese investors to participate in the European market and other markets in the world. The London Stock Exchange has given roadshows, arranged by UBS, this week in Hong Kong, Shanghai and Beijing to get to know more investors and companies in China. The European markets offered a wide range of investment options including fixed-income products, commodities, derivatives, structured products and hedge funds, Bertrand said. Investment in single stocks would also be an option for Chinese investors, he added. In addition, the London Stock Exchange hoped to attract more Chinese companies to go public, said Jon Edwards, Ö deputy head of primary markets for the bourse operator. Currently, more than 60 Chinese companies are listed on the London bourse. “Going to London is not [just] to get access to money, but also information,” Edwards said. There were companies from Europe, Africa and Cental Asia listed in London that offered opportunities for Chinese companies to make asset acquisitions, he added.