Morgan Stanley recently released its economic and asset outlook for 2021. Xing Ziqiang, the banks chief economist in China, Wang Ying, China market strategist, and others continue to be firm bullish on a shares in the latest report, and the CSI 300 index is expected to rise 14% by the end of next year.
Earlier, Goldman Sachs also gave an optimistic forecast for the Asia Pacific stock market, and expected the MSCI Asia Pacific Index (excluding Japan index) to return 18% in dollar terms next year.
Da Mo is optimistic about Chinas economy and suggests over allotment of a shares
On November 18, Morgan Stanley released its global strategy outlook for 2021. The Morgan Stanley strategy team said that it is expected that the global economy will show a V recovery next year, the prospect of the new crown vaccine will be clearer and the continuous policy support will provide a good environment for the stock market and credit next year.
For Chinas economy and Chinas market, Morgan Stanley gave a very optimistic forecast. Morgan Stanley raised its forecast for Chinas GDP growth in 2021 to 9% from the previous 8.9%. The bank believes that Chinas domestic consumption recovery is still strong, mainly because the government has effectively controlled the epidemic and laid a good foundation for the domestic economic recovery. At the same time, the overseas economy is also in the process of continuous recovery, and the growth of foreign demand also supports the recovery of Chinas economy, especially in the first half of next year.
In the most optimistic scenario of Morgan Stanley, the improvement degree of Sino US relations may be greater than market expectations, China may have stronger domestic consumption and overseas demand recovery, domestic credit still has high growth, RMB continues to appreciate, and capital inflow may exceed market expectations. In addition, Morgan Stanley also saw the phenomenon of replenishment of inventory in China and the continuous growth of industrial profits.
Xing Ziqiang, chief economist of China at Morgan Stanley, said that Chinas economy is expected to maintain a relatively strong growth in 2021, and the RMB may continue to strengthen. Among them, personal consumption will become the main growth point of Chinas economy, and the release of residents savings and the overall recovery of the employment market will be the main driving forces for the growth of personal consumption. He predicted that the simultaneous recovery of global demand will also boost Chinas manufacturing industry, and private capital expenditure is expected to return to strong growth. Meanwhile, the growth rate of infrastructure and real estate construction is likely to slow down gradually.
It is mainly based on three points: first, Chinas economy will recover steadily; second, the exchange rate of RMB against the US dollar will appreciate; third, long-term structural opportunities.
MSCI China stock market and A-share are both rated as over matched by Morgan Stanley. Morgan Stanley continues to hold an optimistic position on a shares, believing that the valuation is still attractive. The 14th five year plan will provide support and its weight in the MSCI index may be further enhanced. Next year, however, may not be as good as this year.
Wang Ying, a China market strategist at Morgan Stanley, made a forecast for the relevant markets, raising the target price of a series of Chinese stock indexes covered by it at the end of 2021. Specifically, the latest target prices of Hong Kong Hang Seng Index, Hang Seng China enterprise index, MSCI China Index and Shanghai Shenzhen 300 index will be raised to 28700, 11400, 117 and 5570 respectively by the end of 2021. That is to say, the Shanghai Shenzhen 300 index will rise 14% compared with the current closing price at the end of next year.
Support from many foreign institutions
To be optimistic about China and the Asia Pacific region has become the standard action of many foreign-funded institutions.
Based on economic growth and interest rates remaining low, Goldman Sachs believes that the Asia Pacific stock market may enter the best position in 2021. It is expected that the full year yield will reach 18% and give China an overweight rating. Timothy MOE and other Goldman Sachs analysts were bullish on Chinas stock market after a report released earlier gave Chinas A-shares and Hong Kongs overweight ratings.
Zhao Yaoting, global market strategist of Jingshun Asia Pacific region (excluding Japan), recently commented on Chinas economic data in October and the impact of RCEP on the Asia Pacific market. Zhao Yaoting believes that Chinas October data show a sustained recovery in economic growth. The retail industry continued to rise. Total retail sales rose to 4.3% from 3.3% in September. Online sales accounted for about 24.2% of total sales. Car sales increased by 12% year-on-year, indicating consumers confidence in buying large-scale goods. Catering income increased by 0.8% year-on-year, a significant rebound from the negative 2.9% in the same period last year. Fixed asset investment exceeded expectations and showed continued month on month improvement, up 1.8% from 0.8% in September. The year-on-year growth rate of industrial output value is higher than the expected 6.9%, and the power is expected to continue to the end of the year.
Zhao Yaoting believes that consumer and e-commerce technology will benefit from RCEP. It is estimated that RCEP will increase the regional economy by nearly 200 billion US dollars per year by 2030. Our analysis has narrowed its scope to companies involved in consumer and e-commerce technology.
As Member States reduce 90% of product tariffs to zero in the next decade, reducing tariffs entering Chinas domestic market will increase economic activities among countries in the region, including exports of Australian beef and Korean cosmetics. This will enable Asian consumer companies to develop business and seize market share in the region. E-commerce platforms in the region may also benefit as they promote cross-border trade and e-commerce. Although this round of talks did not include e-commerce regulations on antitrust law and consumer credit, RCEP has opened a new market for these companies, which can be used as a catalyst for future growth.
30% of this years stocks have negative returns this year, and nearly 60% have fallen since August
In the context of novel coronavirus pneumonia epidemic, A share market has been particularly eye-catching this year. The Shanghai and Shenzhen 300 index has gained nearly 20% in the year, and 6 has risen rapidly in July. However, after entering August, the market shock intensified, and many stocks with outstanding performance in the early stage began to adjust in depth. The whole market is a bit like earning only the index but not making money.
According to wind data, 2407 of 4081 A-share companies have recorded a decline in the range since August, accounting for 58.98%. Among them, Kaidi Tui (000939), the largest drop, dropped as much as 64.76%, with 43 stocks falling more than 40%.
Affected by the recent large-scale adjustment of individual stocks, the overall earning effect of A-share market has also declined. The data shows that 32.47% of the companies listed this year have negative earnings since this year. Among them, 18.89% of the companies decreased by more than 10%.
Source of this article: Yang Bin, responsible editor of securities companies in China_ NF4368