Morgan Stanley is turning bullish again on Chinese stocks after almost two years, joining a growing chorus of Wall Street banks that are sanguine on the nation’s outlook as it moves to relax COVID-19 measures, reports Bloomberg. The brokerage lifted China to overweight from an equal-weight position it had held since January 2021. It raised its end-2023 targets for the MSCI China Index to 70 from 59 and for the Hang Seng Index to 21,200 from 18,200.
The new targets imply more than 10% upside, even after stocks surged in Hong Kong and on the mainland Monday as authorities accelerated a shift toward reducing pandemic curbs.
“Multiple positive developments alongside a clear path set toward reopening warrant an upgrade,” strategists including Laura Wang wrote in a note dated Sunday. “We are at the beginning of a multi-quarter recovery in earnings revisions and valuations.”
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