Asian emerging market equities have become more attractive as governments intervened to support economic growth, company balance sheets became healthier and oil pri-ces slumped, Morgan Stanley said.
The brokerage is recommending investors buy more Asian technology and financial stocks at the expense of energy and commodity producers in Latin America and emerging Europe, Morgan Stanley strategists including Jonathan Garner said, without naming any companies.
The brokerage favours stocks in South Korea, Taiwan and China, whose government announced this week a 4 trillion yuan ($586 billion) package to bolster expansion.
“Within emerging markets, we’re certainly getting a lot more positive on Asia,” Garner, the brokerage’s London-based head of emerging market strategy, told reporters in Singapore.
The MSCI Asian Emerging Market Index has lost 56 percent this year on concern the global economic slowdown will hurt profits among the region’s companies. That compares with a 37 percent drop in the Standard & Poor’s 500 index and a 43 percent decline in Japan’s Nikkei 225.
Asian stocks rallied on November 10 after China, whose economy is the biggest contributor to global growth, said it will increase infrastructure spending, tax deductions and farming subsidies. The package is equivalent to almost a fifth of the nation’s gross domestic product.
China’s CSI 300 Index has dropped 67 per cent this year, the biggest decline in Asia and the eighth-worst performer among the 89 global stock benchmarks tracked by Bloomberg.
