Morgan Stanley-China Equity Strategy A-Share Sentiment Rebounds Post Labor...-108143027

MMay9,202409:00PMGMTUpdateChinaEquityStrategyAsiaPacificMorganStanleyAsiaLimited++8522848-6853+8522848-7293A-ShareSentimentReboundsLauraWang+8523963-4186PostLaborHolidayEquityStrategistFurtherstablemacroprints(export),Politburo'sdovishtoneLaura.Wang@morganstanley.comtowardhousing,aswellastheHongKongmarketrecentrally,havecontributedtoA-share'ssentimentimprovement.However,RaymondKLiufurtherfundamentalimprovementandearningsgrowthbottomingoutwouldbekeytofurthersustainthemomentum.EquityStrategistRaymond.K.Liu@morganstanley.comA-shareinvestorsentimentimprovedvs.lateApril:BothweightedandsimpleMSASIsimprovedby2pptto46%and36%,respectively.AveragedailyturnoverCatherineChen(ADT)forChiNext,A-sharesandNorthboundduringApril25-May8improvedby23%,20%and15%,respectively,vs.thepriorcycle.Meanwhile,ADTforEquityEquityStrategistFuturesdroppedby10%overthesameperiod.RSI30-dayforCSI300improvedbyCatherine.Chen@morganstanley.com5.5pptduringthesameperiod.However,consensusearningsestimaterevisionbreadthhasshowenacceleratingdownwardmomentumsincetheendofFebruary.Exhibit1:MSA-shareSentimentIndicator(MSASI):46%(weighted),upby2pptvs.AprilNorthboundnetinflowstotaledUS$3.9bnduringApril25-May8,endingthe24previousfiveconsecutiveweeksofnetoutflows(sincelateMarch):NorthboundYTDnetinflowsrecordedUS$10.8bn.SouthboundnetinflowsrecordedUS$2.3bn100%MSAS...