With the strong start of A-shares in 2023, the enthusiasm of foreign investors to sing more continues to rise. Following Goldman Sachs, Morgan Stanley has also joined the team that is bullish on A-shares and the renminbi again.

  According to a reporter from the Securities Times, many foreign-funded institutions are more optimistic about Chinese assets, and believe that the New Year market is worth looking forward to.

  The accelerated inflow of northbound funds since the beginning of the year also confirms this.

Since 2023, the net inflow of northbound funds has exceeded 33 billion yuan, and the net inflow since November 2022 has reached nearly 130 billion yuan.

China's stock market rating upgraded

  Wall Street giant Goldman Sachs has just released a strategy report, raising the 12-month target of the MSCI China Index from 70 points to 80 points, followed by Morgan Stanley, which also raised the target of the MSCI China Index to 80 points at the end of the year.

  On January 9, Morgan Stanley analyst Laura Wang and others pointed out in their latest report that China's GDP and corporate profits will accelerate growth in 2023, and the Chinese stock market will become the best performing stock market in the world.

Morgan Stanley maintained its overweight MSCI China Index and raised its year-end target from 70 to 80.

  The Morgan Stanley research report pointed out that China's GDP and corporate profits will accelerate growth in 2023, while internal and external risks will decline, which may drive further increases in related valuations.

  The MSCI China Index closed at 70.42 points at the latest closing price. Since the lowest point of 46.92 points at the end of October last year, it has rebounded by 50%.

Morgan Stanley raised its target on the index to 80 points, believing the index has more than 10% upside.

  In December last year, Morgan Stanley raised the rating of Chinese stocks in global emerging markets to "overweight", which is the first time the agency has maintained a cautious attitude towards Chinese stocks for nearly two years.

  When further raising the target position of the MSCI China Index, Morgan Stanley pointed out that it is re-evaluating China's equity risk premium (ERP), and many factors prove that the bull market cycle belonging to A shares has begun.

  For the RMB trend, Morgan Stanley is also optimistic.

It sees the yuan rising to 6.65 per dollar by the end of 2023, up 1.8% from current levels.

  Morgan Stanley China Chief Market Strategist Wang Ying said that Morgan Stanley is currently more cautious about European and American stock markets, especially the US market. The Chinese stock market will become the leader of the global stock market in the next stage, and global emerging markets will perform well.

"Our upgrade of China's stock market rating is not only based on the adjustment of the anti-epidemic policy. According to our historical experience, there are seven main categories of factors that will have a greater impact on the stock market at different times, which can help us better capture the stock market. turning point," she said.

  Wang Ying further analyzed, "Although the two major factors of macroeconomics and valuation are not outstanding, the remaining five major factors are changing for the better at the same time, including the tightening of global liquidity will improve significantly next year; China's policy cycle is improving; strong The U.S. dollar has come to an end, and the renminbi is expected to re-appreciate; Sino-US bilateral relations have improved; China’s regulatory framework has been established as a whole.”

Be bullish on Chinese assets and then become a consensus

  As the expectation of China's economic recovery continues to grow, the A-share market and the RMB exchange rate have shown strong performance, and foreign capital "real money" has increased their purchases of Chinese assets.

  Wind data shows that since 2023, northbound funds have net bought 33.520 billion yuan, of which 12.753 billion yuan was bought on January 5. This is also since December 1, 2022. tens of billions.

In fact, since November 2022, northbound funds have shown a momentum of accelerated inflow, during which the net purchase amount reached 128.628 billion yuan.

  The RMB exchange rate also rebounded strongly during this period.

On the first trading day in 2023, the onshore and offshore RMB/USD exchange rates both rose above the 6.9 mark.

Subsequently, the RMB exchange rate continued to rebound and strengthen. As of 16:30 on January 10, the onshore RMB against the US dollar closed at 6.7772. Since the New Year, it has rebounded by more than 1,800 points, with a cumulative increase of 2.61%.

  Northbound funds and the RMB exchange rate resonate, reflecting the general optimism of foreign institutions on Chinese assets.

Goldman Sachs released a report on January 9 that China's stock market is expected to rise by 15% this year, and the yuan is expected to rise to its highest level since April last year.

  Goldman Sachs' strategy report said that it raised the 12-month target of the MSCI China Index from 70 points to 80 points, emphasizing that the main reason is the overall low valuation, as well as multiple support points in areas such as real estate, Internet regulation and policy stimulus.

  In addition, Goldman Sachs expects the yuan to appreciate to 6.5 against the dollar by the end of this year, compared with its previous forecast of 6.9.

  Goldman Sachs strategy team believes: "In the global context to 2023, China looks in a favorable position in terms of economic growth, policy and inflation cycle. The current market context makes us believe that the risks of continuing to reduce or short Chinese stocks are significantly higher for long Chinese equities.”

  In addition to Goldman Sachs, foreign institutions such as Bank of America, HSBC, and Vanguard are also optimistic about the performance of Chinese assets in 2023.

  Bank of America investment strategy analysts once pointed out the top ten trading trends in 2023, one of which is to be long on Chinese stocks.

"China has high excess savings, and it is still a reverse long trading strategy for Chinese stocks."

  HSBC predicts that China's GDP will grow by 5.0% year-on-year in 2023, and has significantly raised its forecast for China's GDP growth in 2024, from 4.8% to 5.8%.

  Pioneer Pilot pointed out in its latest analysis report that China is currently committed to optimizing epidemic prevention and control measures, promoting vaccine and drug research and development, and improving hospital facilities. These measures will help stabilize the economy. It is expected that after March 2023, China's overall The economy will see a more obvious rebound, and China's annual GDP growth rate in 2023 is expected to reach about 4.5%.