Morgan Stanley-China Equity Strategy A-Share Sentiment Improves after Two ...-107691088

MApril18,202409:00PMGMTUpdateChinaEquityStrategyAsiaPacificMorganStanleyAsiaLimited++8522848-6853A-ShareSentimentImprovesLauraWangafterTwoWeeksofDecline;ConcernsRemainEquityStrategistLaura.Wang@morganstanley.comSentimentimprovedasregulatorstriedtocalmthemarketoverconcernsnewstockmarketregulationscouldbeusedasExhibit1:MSA-shareSentimentIndicatortighteningtools.Ongoingdeflationarypressureandgeopolitical(MSASI):50%(weighted),up5pptsvs.April10uncertaintycouldkeepthingsvolatileforlonger.Recommendstock-pickingandthematicinvestingoverindexupside.100%MSASI(Simple)=600090%MSASI(Weighted)A-shareinvestorsentimentupvs.priorweek:WeightedandsimpleMSASIs80%MSASI(Simple)Current5500increasedby5pptsand7ppts,to50%and46%,respectively.Averagedailyturnover70%MSASI(Weighted)Current75%(ADT)forChiNext,A-shares,equityfuturesandNorthboundduringApril11-17rose60%CSI300(RHS)10%,11%,53%,and22%,respectively,vs.thepriorcycle.RSI30-dayforCSI300also50%5000increasedby6.7pptsduringthesameperiod.Meanwhile,consensusearnings40%estimaterevisionbreadthcontinuedtoseeacceleratingdownwardmomentum30%4500duringtheannualearningsresultsseason.20%10%50%NorthboundnetoutflowstotaledUS$39mnduringApril11-17,markingfour0%4000consecutiveweeksofnetoutflows:NorthboundMTDnetinflowstotalUS$1.6bn46%andYTDnetinflowstotalUS$8.2bn.SouthboundMTDnetinflowscurrentlystand3500...