Morgan Stanley-China Financials Policy shift has paid off earlier than exp...-107899136

MApril29,202402:46PMGMTIdeaChinaFinancialsAsiaPacificMorganStanleyAsiaLimited++8522848-6729+8523963-4624PolicyshifthaspaidoffearlierRichardXu,CFA+8522239-7033thanexpected+8523963-2224EquityAnalyst+8523963-4703Despitetheongoingmarketdebate,weseemoreevidenceofRichard.Xu@morganstanley.compolicyfocusshiftpayingoffearlierthanexpected,includingmoderatingfinancialsystemrisksandhealthyexportgrowthChiyaoHuangdespiteheadwinds.Thiscouldcontinuetosupportthereboundinfinancialstocks.EquityAnalystChiyao.Huang@morganstanley.comPolicyfocusonprioritizingfinancialriskcontainmentandindustrialsectorupgradesispayingoffdespitethemarketconcernsaboutnegativePPI:WeRickZhaoacknowledgedthatthisisnotaeasyprocess,givenrisksaccumulatedduringyearsofcredit-drivenstimuluspolicies.However,webelieveprioritizingriskcontainmentResearchAssociate–particularlyinpropertyandLGFV–whilepushingindustrialupgradesandRick.Zhao@morganstanley.comtoleratingsomenegativePPItocushioneconomicdownsideisthebetterpolicycombofromalong-termperspective,albeitlessfriendlytothecapitalmarketsinBerylYangthenearterm.Sinceimplementationin2021,weareseeingmoreandmoreevidencethatthepolicyshiftisgraduallypayingoffafteracoupleofyearsofinitialpain.ThisResearchAssociateincludesgraduallymoderatingpropertyandLGFVrisks,continuedindustrialBeryl.Yang@morganstanley.comupgrades,andhealth...