Morgan Stanley: The breakthrough in Hong Kong stocks requires a smooth trade agreement between China and the United States, expected in the third quarter

Zhitong
2025.05.21 07:18
portai
I'm PortAI, I can summarize articles.

Morgan Stanley's Chief Asia and China Equity Strategist Liu Mingdi stated that during the 90-day period of continued negotiations between China and the United States, Hong Kong stocks are expected to fluctuate within a range. A breakthrough in the Hong Kong stock index requires a relatively smooth agreement from the China-U.S. negotiations, which may take until the third quarter. Liu Mingdi expressed an overall positive outlook for Hong Kong stocks this year, while A-shares are relatively weaker in terms of performance and valuation compared to Hong Kong stocks. He remains optimistic about the internet and healthcare sectors, noting that if U.S. healthcare reforms lead to a reduction in drug prices, it would benefit the positive ecosystem and products established by Chinese innovative drugs. Other trading themes to watch include industry consolidation and market access opening, the latter being more related to the financial sector. He further pointed out that more large companies are listing in Hong Kong, making it easier for mainland Chinese and global investors to find more suitable investment targets in Hong Kong. Morgan Stanley's Chief Economist for China and Head of Greater China Economic Research Zhu Haibin stated that the People's Bank of China may have 1 to 2 more interest rate cuts this year, but the pace will be controlled, which may deviate somewhat from market expectations. A formal stabilization of the real estate market may not occur until 2026, but key indicators, including the decline in new construction, will show a significant narrowing compared to the past two years

According to the Zhitong Finance APP, Liu Mingdi, Chief Asia and China Equity Strategist at Morgan Stanley, stated that during the 90-day period of continued negotiations between China and the United States, Hong Kong stocks are expected to fluctuate within a range. A breakthrough in the Hong Kong stock index requires a relatively smooth agreement to be reached in the China-U.S. negotiations, which may take until the third quarter.

Liu Mingdi expressed an overall positive outlook for the performance of Hong Kong stocks this year, while A-shares are relatively weaker in terms of performance and valuation compared to Hong Kong stocks. He remains optimistic about the internet and healthcare sectors, noting that if U.S. healthcare reforms lead to a reduction in drug prices, it would benefit the positive ecosystem and products established by Chinese innovative drugs. Other trading themes to watch include industry consolidation and market access opening, the latter being more related to the financial industry. He further pointed out that more large companies are listing in Hong Kong, making it easier for investors from mainland China and around the world to find more suitable investment targets in Hong Kong.

Zhu Haibin, Chief Economist for China and Head of Greater China Economic Research at Morgan Stanley, stated that the People's Bank of China may have 1 to 2 more interest rate cuts this year, but the pace will be controlled, which may deviate somewhat from market expectations. The stabilization of the real estate market may not occur until 2026, but key indicators, including the decline in new construction, will show a significant narrowing compared to the past two years

Source: Zhitong The copyright of this article belongs to the original author/organization.
The views expressed herein are solely those of the author and do not reflect the stance of the platform. The content is intended for investment reference purposes only and shall not be considered as investment advice. Please contact us if you have any questions or suggestions regarding the content services provided by the platform.