Morgan Stanley believes that China's decisive measures to continue to improve epidemic prevention and control will continue to help market sentiment recover, which is the second time in a week that it is bullish on Chinese stocks.
After upgrading Chinese stocks for the first time in nearly two years, Morgan Stanley once again took a clear-cut stand on Chinese stocks.
On Thursday, Morgan Stanley saidChina's stock market will outperform the vast number of emerging markets, or even its global counterparts, as the Chinese government's decisive measures to continue to improve epidemic prevention and control will continue to help market sentiment recover.
'We believe a series of government follow-up actions and other factors will help boost market sentiment, 'the Morgan Stanley Laura Wang analyst team wrote in a Dec. 8 report.Morgan Stanley pointed out that the factors that are expected to continue to push the Chinese stock market higher in the future include:
The audit inspection results that PCAOB expects to release as early as the end of December
Us Secretary of State Anthony Lincoln's planned visit to China
And the Central Economic work Conference to further clarify the path of epidemic prevention and control and macroeconomic targets for 2023.
China's stock market has rebounded strongly over the past month. The CSI 300 index rose nearly 10 per cent in November, its biggest monthly gain since July 2020, while the Hong Kong-listed index of mainland Chinese stocks rose 29 per cent in November, its biggest monthly gain since 2003, after falling 40 per cent from January to October.
Trading volume is also picking up.According to Morgan Stanley, from December 1 to 7, the average daily trading volume of the gem index and A-shares as a whole increased by 25% and 19% respectively compared with the previous cycle.
This is the second time in a week that Morgan Stanley is bullish on Chinese stocks. Over the weekend, Morgan Stanley upgraded its rating on Chinese stocks to Overweight from Equal-weight.It is worth noting that Morgan Stanley has been rating Chinese stocks for nearly two years since January 2021.
Recently, Wall Street banks have taken turns to sing more and more about the Chinese stock market.
JPMorgan Chase & Co said the MSCI china index was expected to rise 17 per cent by the end of 2023, driven by a 14 per cent increase in earnings per share and a target price-to-earnings ratio of 10.5 times.
Goldman Sachs Group also reiterated his confidence in the Chinese stock market and maintained his overrated rating on the MSCI China Index. The MSCI China Index and the CSI 300 Index are expected to return as high as 16% in the next 12 months, and 19% and 21% if the exchange rate factor is taken into account.
Goldman Sachs Group also raised China's Hong Kong shares from low allocation to fair allocation, and gave the A-share market a "high allocation" proposal in 2023, which is expected to see a significant rebound in valuations, with a net inflow of northbound capital of about $30 billion.
In addition, strategists such as Citigroup and Bank of America Corporation also expressed their optimistic views on the stock market in their recent reports. Strategists such as Citigroup's Robert Buckland upgraded Hong Kong stocks to overweight; Michael Hartnett, chief investment strategist at Bank of America Corporation, mentioned long Chinese stocks in his 2023 preferred recommendation trading.
Edit / phoebe