Morgan Stanley has released a market strategy report for the Asia-Pacific region. Awareness of the issues raised by the bank's customers is increasing. In July, the bank recommended a 'hold' rating for the information technology sector and suggested 'switching horses' to the essential consumer goods sector. They believe that making constructive suggestions for the information technology sector at this stage is premature, and reiterate their 'in sync with the market' rating, despite recent underperformance and lower valuation.

The bank points out that the information technology sector under emerging markets peaked on July 11th and has since fallen by 15% over the past two months, while the essential consumer goods sector has performed steadily. The overall emerging markets index has dropped by about 6%. The bank believes that the market will maintain a cautious outlook on global economic growth prospects. There is ongoing market attention to the debate over the extent of the Fed's interest rate cut (25 or 50 basis points). In this situation, the bank warns clients that the information technology sector is expected to perform poorly, while the essential consumer goods sector typically continues to show outstanding performance for at least 6 months after such events.

The bank has listed 2 Hong Kong stocks in its focus stock list for the Asia-Pacific region (excluding Japan), including Tencent (00700.HK) and Zijin (02899.HK). (wl/k)

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