Morgan Stanley strategists have adopted a more optimistic outlook on the Chinese stock market, aligning with their Wall Street counterparts. They predict that technological advancements will drive a more sustainable rally in Chinese stocks. Strategists Laura Wang and her colleagues have upgraded their rating on this asset class to equal-weight, forecasting the MSCI China Index to reach 77 by the end of 2025, up from a previous target of 63. This projection suggests an additional 4% increase from recent closing levels. Earlier this month, the index entered a bull market.
In a report, the strategists noted that the Chinese stock market, particularly the offshore segment, has undergone a structural transformation. This development gives them more confidence in the sustainability of the MSCI China Index's recent performance improvement compared to the rebound observed in September last year. This upgrade marks a significant shift for a company that has long expressed skepticism about Chinese stocks, indicating that global investors' attitudes towards this market may be undergoing a fundamental change.
