Morgan Stanley says ‘underappreciated’ Chinese consumer stocks to reverse industry-beating decline amid job market improvement
- US investment bank anticipates ‘improvement in mass demand in the second half’
- Current bearish view on consumer stocks is due to an uneven pace of recovery, lender says in report
Morgan Stanley has recommended adding exposure to Chinese consumer stocks, the worst-performing sector this year, as an improvement in the country’s jobs market is set to boost household incomes and unwind excess savings to further buoy consumption.
Key to the call are the about 20 million jobs that will be added to the contact-based services industry in the following four to five quarters, driving momentum in consumption recovery among the middle class and mass market, analysts at the US investment bank including Lillian Lou and Jonathan Garner said in a report on Sunday.
“We anticipate an improvement in mass demand in the second half, which would still benefit travel and the experience-related and incrementally basic staples categories,” the report said. “Domestic consumer stocks, in particular, have a larger exposure in these categories and tend to be underappreciated currently.”
