TechFlow news — Morgan Stanley stated that from a technical standpoint, China's CSI 300 Index may still have approximately 10% upside potential in the short term.
In a report dated September 26, strategists led by Laura Wang at the firm explained this forecast is based on their analysis of the cost of borrowing under China's re-lending program (2.25%) compared to the current dividend yield of the CSI 300 Index (2.46%).
Morgan Stanley noted that both the Politburo meeting and the stimulus measures announced earlier this week by the central bank and other regulators were highly positive. They added that what truly surprised markets were the market stabilization measures, which they described as unprecedented.
The firm emphasized that the most critical factor now is swift follow-up to clarify implementation details and timelines. Chinese equities posted their best week in a decade following the Politburo's commitments.
