Morgan Stanley-China Equity Strategy A-Share Sentiment Stayed Flat Despite...-107156838

MMarch21,202409:00PMGMTUpdateChinaEquityStrategyAsiaPacificMorganStanleyAsiaLimited++8522848-6853A-ShareSentimentStayedFlatLauraWangDespiteImprovedMacroDataforJan-FebEquityStrategistLaura.Wang@morganstanley.comInvestorsentimenthasbeenrangeboundinrecentweekssincetherecentlowinJan-24.DespitethepositiveJan-FebmacroExhibit1:MSA-shareSentimentIndicatordata,weseemoresofteningaslikelyinMarchandbeyond.We(MSASI):58%(weighted),sameasMarch13thereforeadvisecautionagainstprematureoptimismandrecommendOWAvs.offshoreandfocusonalphageneration.100%MSASI(Simple)=600090%MSASI(Weighted)A-shareinvestorsentimentlargelyflatvs.thepriorweek:Weightedandsimple80%MSASI(Simple)Current5500MSASIsdroppedby1pptandhit58%and54%,respectively.Averagedailyturnover70%MSASI(Weighted)Current75%(ADT)forChiNext,A-sharesandNorthboundduringMarch14-20increased5%,2%60%CSI300(RHS)and3%,respectively,vs.thepriorcycle;whileADTforequityfuturesduringthe50%5000sameperioddecreasedby12%.RSI30-dayforCSI300declinedby0.1pptduringthe40%sameperiod.Themarginalimprovementoffsettheaccelerateddownward30%4500momentumofconsensusearningsestimaterevisionbreadth.20%10%58%NorthboundnetinflowstotaledUS$2.5bnduringMarch14-20,theseventh0%4000straightweekofnetinflows:NorthboundYTDnetinflowstotaledUS$10.1bnand54%MTDnetinflowstotaledUS$3.6bn.SouthboundnetinflowwasUS$2.9bnduring3500this...