The UK remains attractive despite Brexit: Fidelity

Relations with China unlikely to be affected much by vote to leave EU

The United Kingdom remains an attractive destination for Chinese investors after Brexit, and investing in the healthcare sector offers potential, Matt Siddle, a portfolio manager at global asset management company Fidelity International, told China Daily.

“TheUKeconomy will continue to be sound after Brexit and the pool of skilled and flexible workers is large in the UK. So there are many reasons for the United Kingdom to be a popular destination for Chinese investors,” said Siddle.

Siddle said investing in healthcare companies in the UKoffers good opportunities.

“Healthcare is a longterm structural growth story with increasing demand from an aging population, and the outlook for pharmaceutical companies is improving as their new drug pipelines are healthy, the cost of R&D has declined substantially and the first cycle review approvals of new drugs has increased," said Siddle.

“With attractive valuations, the healthcare sector is definitely one of the most Matt Siddle, attractive areas with growth opportunities,” he added.

Siddle also said the UK stock market has not been impacted much by the Brexit because most of the earnings of the companies listedonthe bourse are generated from outside of the country. Less than 30 percent of the revenue of firms listed on the FTSE 100 index comes from the UK.

“The vote to leave the EU had a negative impact on investor sentiment on UK equities, but it also creates opportunities for investors to buy good-quality companies with cash-generative businesses at a discounted price,” added Siddle.

Fidelity said in the last 18 months European markets have been supported by macro factors such as falling oil prices and euro depreciation, as well as ample liquidity injected through the European Central Bank’s expanded quantitative easing program.

“In light of the referendum result, central bank policy is likely to remain supportive and European equity market valuations will benefit from Chinese stimulus measures, and mergers and acquisitions,” said Siddle.

Wu Weijun, chief partner of PwC Beijing, said the referendum result was a disappointment because economic interconnectivity is the future and Brexit is a step back.

“But I don’t think ChinaUKrelations will be impacted much by Brexit,” saidWu.

According to Wu, multinational companies should continue to have strategic cooperation with the UK.

Bilateral trade between China and the EU was $564.85 billion last year, while trade between China and the UK reached $78.54 billion, according to the General Administration of Customs.

With attractive valuations, the healthcare sector is definitely one of the most attractive areas with growth opportunities.”

portfolio manager at global asset management company Fidelity International