Morgan Stanley’s “High Conviction” Trade Ideas in Asia Pacific Stocks

Renesas Electronics

Morgan Stanley analysts have identified Renesas Electronics, a Japan-listed company and one of the largest semiconductor companies in the world, as a high conviction trade idea. They expect the stock to rise by over 27% in the next 12 months to 3200 yen ($22.40). The analysts believe that the current market valuation is undervalued, and the stock offers a ~10% discount compared to similar companies like NXP, STMicro, and Microchip. The consensus price target from analysts compiled by FactSet supports this view, indicating a 21.8% upside from the current share price of 2,504 yen.

Macquarie Group

Morgan Stanley also highlights Macquarie Group, one of the largest infrastructure asset management firms in Australia, as a high conviction trade idea. They anticipate the stock to rise by more than 19% in the next 12 months to 209 Australian dollars ($137). The bank’s price target is probability-weighted, with a 30% chance of a bull case and a 60% chance of a base case scenario. The bank sees Macquarie Group’s structural growth options in renewables, infrastructure, and private markets as reasons for a bullish sentiment. The consensus price target compiled by FactSet suggests a 9.1% upside from the current share price of 175 Australian dollars.

ICICI Bank

Morgan Stanley’s third high conviction trade idea is ICICI Bank, one of India’s largest privately held lenders. The analysts expect the stock to rise by nearly 40% in the next 12 months to 1350 Indian rupees ($13.70). As a whole, Morgan Stanley recently upgraded Indian stocks to “overweight,” citing a solid profit outlook and the country’s attractiveness to investors in a multipolar world. The consensus price target from analysts compiled by FactSet points to a 21.6% upside from the current share price of 970 Indian rupees. The stock is listed in the U.S. and has a buy rating from 37 out of 40 analysts covering the lender.

Please note that Morgan Stanley advises against treating these three trade ideas as a portfolio due to the lack of consideration for concepts like negative correlation and diversification. There is a risk of losing all or a substantial portion of your investments if these trade ideas are viewed collectively.

– AsumeTech’s