Morgan Stanley: Asian and emerging market equities are entering late stage of bear market

Asian and emerging market equities are entering the late stages of a bear market, but earnings and valuations aren’t enough to herald a turnaround, Morgan Stanley said. Morgan Stanley maintained its neutral view on the region.

Morgan Stanley strategists including Jonathan Garner said in a note on Tuesday that the risk is known, and while it “remains strong,” further downside is possible ahead. The bear market “straddles valuation, regulatory, geopolitical and supply chain pressures,” strategists said.

Tighter monetary policy by the world’s major central banks, rising inflation and a resurgence of the virus so far this year have left Asian stocks likely to struggle this year. More than $2 trillion has been wiped off the market value of Asian equities after a sharp drop in the first four months of 2022.

Morgan Stanley said it prefers Japanese stocks, as well as countries that export commodities or benefit from higher interest rates, because of higher returns. Morgan Stanley upgraded Brazil’s stock to overweight and said it remains bullish on Saudi Arabia, Australia, Indonesia and Singapore.

This article is reprinted from: https://news.futunn.com/post/15418548?src=3&report_type=market&report_id=205300&futusource=news_headline_list
This site is for inclusion only, and the copyright belongs to the original author.