Morgan Stanley-China Equity Strategy A-Share Sentiment Dropped Given Insuf...-106918349

MMarch7,202409:00PMGMTUpdateChinaEquityStrategyAsiaPacificMorganStanleyAsiaLimited++8522848-6853+8523963-4186A-ShareSentimentDroppedLauraWangGivenInsufficientNPCPackageEquityStrategistMarketlikelytoremainvolatileasNPCfiscalpackageisLaura.Wang@morganstanley.cominsufficienttobreakthedeflationconcernandcorporateearningsremainchallenged.WesuggestOWA-shares;monitorCatherineChenpolicystep-up,privatesectorsupportandpropertymarketstabilization,etc.,forfuturesignsofmarketturnaround.EquityStrategistCatherine.Chen@morganstanley.comA-sharesentimentcamedownnotablyafterpeakinglastweek:WeightedandsimpleMSASIsbothdroppedby17pptto53%and50%,respectively.DailyturnoverExhibit1:MSA-shareSentimentIndicatorforChiNext,A-shares,equityfuturesandNorthboundturnoverdecreasedby35%,(MSASI):53%(weighted),17pptdownv.s.31%,27%and25%,respectivelyvs.thepreviouscyclecut-offday.RSI30-dayforCSIFebruary28300wentupby8.7pptduringthesameperiod.Consensusearningsestimaterevisionsbreadthremainedinnegativeterritory,althoughthespeedhasslowed.100%MSASI(Simple)=600090%MSASI(Weighted)NorthboundnetinflowstotaledUS$597mnduringFebruary29-March6,and80%MSASI(Simple)Current5500SouthboundsawweeklynetinflowsofUS$2.0bn:Thisisthefifthconsecutive70%MSASI(Weighted)Current75%weekwherewesawnetNorthboundweeklyinflow.TotalNorthboundnetinflowin60%CSI300(RHS)FebruarywasUS$8.4b...