Core Viewpoint - Morgan Stanley's report indicates that the covered markets are nearing their "bull case" target for June 2026, primarily due to valuation multiple expansion, but questions the sustainability of this trend without significant acceleration in global growth [1] Market Analysis - The analysis suggests that Asian and emerging market stock valuations are unlikely to sustain without a renewed acceleration in earnings growth, with optimism for a rebound in India's growth [1] - The report anticipates a potential further weakening of the US dollar, with the Bank of Japan having room for interest rate hikes, while the Federal Reserve is expected to implement significant rate cuts [1] Investment Strategy - Following increased holdings in China and South Korea this year, current portfolio risk is lower than in previous years, with "overweight" positions in Japan, Singapore, India, UAE, and Brazil, while "underweight" positions are taken in Indonesia and Saudi Arabia [1] - The industry strategy favors sectors including finance, domestic e-commerce/consumption, and industrials, while maintaining an "underweight" stance on energy and materials (excluding gold), and adopting a selective strategy in the information technology sector [1] Index Projections - Morgan Stanley maintains a "base case" target for the Hang Seng Index at 24,500 points by June 2026, corresponding to a forecasted P/E ratio of 10.6x; the "bull case" target is set at 28,000 points with a P/E ratio of 11.5x, while the "bear case" target is 18,300 points with a P/E ratio of 8.2x [1]