China Shares Lower - Morgan Stanley Thinks It is Time to Pull the Trigger
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MSCI Hong Kong Index ETF (NYSE: EWH), which tracks stocks in China, is expected to open lower today after shares in China sold off, posting the sixth loss out of seven sessions.
Last week the Chinese stock market sold off after the government reported negative shipping and industrial data, sending stocks down to three month lows. The latest sell-off comes on the heals of news out of Shanghai Securities on Wednesday which claimed that the four biggest state-owned banks issued relatively few new loans in the first two weeks in May.
Jonathan Garner, a strategist at Morgan Stanley, thinks now is a good time for investors to pull the trigger on China.
In a note to investors, he wrote that the "Bear phase for equities has ended and valuations are low relative to own history, emerging/developed market peers over a 10 year period."
Some of the reasons for his bullish call are easing fiscal policy, controlled inflation, and a housing market that is stabilizing.
Morgan Stanley's year-end targets are 13400 for the HSCEI and 23600 for the HSI, implying a rally of 32 and 18 percent respectively.
Some specific stocks Morgan Stanley likes includes: Sohu.com (Nasdaq: SOHU), Ctrip.com (Nasdaq: CTRP), China Unicom (NYSE: CHU), CNOOC (NYSE: CEO).
Last week the Chinese stock market sold off after the government reported negative shipping and industrial data, sending stocks down to three month lows. The latest sell-off comes on the heals of news out of Shanghai Securities on Wednesday which claimed that the four biggest state-owned banks issued relatively few new loans in the first two weeks in May.
Jonathan Garner, a strategist at Morgan Stanley, thinks now is a good time for investors to pull the trigger on China.
In a note to investors, he wrote that the "Bear phase for equities has ended and valuations are low relative to own history, emerging/developed market peers over a 10 year period."
Some of the reasons for his bullish call are easing fiscal policy, controlled inflation, and a housing market that is stabilizing.
Morgan Stanley's year-end targets are 13400 for the HSCEI and 23600 for the HSI, implying a rally of 32 and 18 percent respectively.
Some specific stocks Morgan Stanley likes includes: Sohu.com (Nasdaq: SOHU), Ctrip.com (Nasdaq: CTRP), China Unicom (NYSE: CHU), CNOOC (NYSE: CEO).
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