Morgan Stanley's Chief Strategist for Chinese Stocks: Chinese stocks are expected to attract global capital allocation, and the offshore market may perform better
Morgan Stanley's Chief Equity Strategist for China, Wang Ying, stated that Chinese stocks are expected to attract global capital allocation against the backdrop of a weakening US dollar, especially the offshore market may perform better. She is optimistic about the long-term prospects of the Chinese technology sector but reminds investors to pay attention to the uncertainties of the trade war and suggests appropriately allocating high-dividend state-owned enterprise stocks to enhance defensive attributes. CITIC Securities Co., Ltd.'s Chief Economist, Ming Ming, pointed out that the RMB may show a fluctuating and slightly strong trend, while the Federal Reserve will be relatively hesitant on the issue of interest rate cuts
Morgan Stanley stated that Chinese stocks are expected to attract global capital allocation.
On Friday, May 30th, Wang Ying, Chief China Equity Strategist at Morgan Stanley, stated at a media conference that against the backdrop of a weakening dollar, global institutional investors are looking to diversify their asset allocation, and Chinese stocks with reasonable valuations and lower capital allocation are expected to attract some capital inflows.
She pointed out that the offshore market (such as offshore Hong Kong stocks) may perform better, as the appreciation of the renminbi against the dollar provides more obvious support for the offshore market, and Trump's policies tend to suppress the dollar. Historically, when the dollar weakens, Hong Kong stocks usually perform better, as they better reflect foreign capital sentiment.
Wang Ying is particularly optimistic about the Chinese technology sector, believing it has strong innovation capabilities and global competitiveness, with a long-term outlook that is "quite bright." However, she also reminded that the uncertainty of the trade war will still lead to market volatility, so she recommends investors appropriately allocate high-dividend state-owned enterprise stocks in their portfolios to enhance defensive attributes.
The report distributed at the media conference pointed out that key catalysts to watch for in the coming period include the expiration of the 90-day tariff suspension between China and the U.S. in mid-July, and the Central Political Bureau meeting at the end of July, which will assess growth in the first half of the year and make policy adjustments.
In addition, Ming Ming, Chief Economist at CITIC Securities, also stated this Wednesday that in the second half of the year, under the interaction of internal and external factors, the renminbi may show a "volatile and slightly strong" trend.
He also pointed out that the U.S. is currently facing structural contradictions such as the Triffin dilemma and high fiscal deficits. Inflation has not completely subsided, but the economy is beginning to show signs of fatigue, so the Federal Reserve will be more hesitant about whether to cut interest rates.
In contrast, the Chinese economy is gradually recovering amid fluctuations, and there is still room for policy measures. It is expected that China's GDP will grow by around 5% in 2025, and the stock-bond cost-performance indicators show that the valuation level of A-shares remains superior.
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