Morgan Stanley(US:MS) Sou Hu Cai Jing·2025-08-18 23:23Core Viewpoint - Morgan Stanley has raised its allocation rating for the Chinese stock market within the global emerging markets, citing improvements in the overall ecosystem since September of last year [1] Group 1: Market Performance and Predictions - The Hong Kong stock market has performed well since the beginning of the year, while the A-share market has shown significant improvement since June [2] - Morgan Stanley predicts that the Federal Reserve will begin its first rate cut in March next year, with a total of seven cuts expected by 2026 [2] - The firm maintains its index point predictions for the Hang Seng Index at 27,800 and the CSI 300 Index at 4,000, with optimistic targets of 28,000 and 4,700 respectively [3] Group 2: Asset Allocation Strategy - Morgan Stanley recommends an increased allocation to A-shares over Hong Kong stocks due to lower sensitivity to geopolitical risks and concentrated unlocking pressure on new consumer stocks in Hong Kong [5] - The firm suggests a balanced approach to stock assets while favoring bonds and credit assets during the rate cut cycle [3] Group 3: Investment Opportunities - There is a strong focus on artificial intelligence and high-dividend stocks, with confidence in China's technological capabilities and potential in global markets [6][7] - The "anti-involution" policy is expected to positively impact the stock market over the next 12 to 24 months by optimizing resource allocation and improving corporate profitability [7] Group 4: Capital Flow and Market Dynamics - The Chinese liquidity index turned positive in June, indicating excess funds entering multi-asset allocations, which supports asset prices [4] - The net inflow of southbound funds has exceeded $110 billion from January to July this year, indicating sustained interest in Hong Kong stocks [5]