Morgan Stanley cut its one-year forecast for the MSCI China Index by 12.5 percent, and cut expectations for the Hong Kong-listed Hang Seng China Enterprises Index, which tracks the performance of mainland companies, from 8,250 to 7,320 points, compared to the last close. even so, it represents an appreciation potential of about 15 percent. Strategists led by Laura Wang did not change their overweight recommendation, but highlighted that they reduce the big bank’s exposure to the region.
Although the Chinese market may continue to outperform in the second half of the year regulatory reliefs due to
we recognize that there are significant hurdles to overcome first and that the space for investors to reassess the market is narrowing
– wrote the strategists in their recent analysis.
Morgan Stanley’s decision is similar to Goldman Sachs measure followed by the other major American financial institution last week as well concerns about the profitability of companies and the Chinese currency lowered the target value of MSCI China due to The steps taken by the two big banks in quick succession
underlines the rapid decline in optimism towards Chinese stocks compared to the beginning of the year,
when almost all of Wall Street’s biggest banks were bullish amid reopening fever.
The ailing economy and geopolitical tensions have caused key Chinese indices to underperform globally, with both the MSCI China and HSCEI indices falling sharply in recent weeks. Although it is revival of expectations regarding state support in the real estate market resulted in a big jump on Friday, few people currently expect that the rise will be sustainable.
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