Morgan Stanley's major shift: no longer bearish on the MSCI China Index, the Chinese stock market has undergone a "structural change"
The team led by Morgan Stanley analyst Laura Wang announced that they no longer hold a bearish view on the Chinese stock market, expecting that the market's upward momentum will be more sustainable driven by technological breakthroughs. The report pointed out that there has been a structural change in the Chinese stock market, with the MSCI China Index expected to rise to 77 by the end of 2025, a significant upward adjustment from the previous target of 63. This rating upgrade is seen as a fundamental shift in global investors' attitudes towards the Chinese market
On Wednesday, the China strategy team led by Morgan Stanley analyst Laura Wang published a report stating that they are no longer bearish on the Chinese stock market and have adopted a more optimistic view, expecting that the upward momentum of the Chinese stock market will be more sustainable driven by technical breakthroughs.
The report indicated that the Chinese stock market (especially the offshore market) has finally undergone a structural qualitative change, which is more convincing than the rebound in September last year, and the recent improvement in the MSCI China Index can be sustained.
Morgan Stanley expects the MSCI China Index to rise to 77 by the end of 2025. The previous target was 63, representing an additional 4% increase from Wednesday's closing level. Earlier this month, the index entered a bull market.
Previously, Morgan Stanley had maintained a cautious stance on Chinese stocks. Some analysts pointed out that Morgan Stanley's upgrade of its rating this time represents a significant shift, indicating that global investors' attitudes towards the Chinese market may be undergoing a fundamental change. Even in October, when China's monetary stimulus measures triggered a surge in the stock market, Morgan Stanley hardly changed its stance—only reducing its underweight position.
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