M IdeaAsia EM Equity Strategy | Asia PacificAlpha, Beta, Thematic BiweeklyWe launch a biweekly briefing on Asia and EM equities, identifying alpha opportunities at the market, sector, thematic and stock level. In this report we explore Asian divergence, India valuations and geopolitical risks. See inside for market performance, valuations, flows & positioning metrics. Morgan Stanley Asia (Singapore) Pte.+Daniel K BlakeEquity Strategist Daniel.Blake@morganstanley.com +65 6834-6597 Jonathan F GarnerEquity Strategist Jonathan.Garner@morganstanley.com +65 6834-8172 Kristal JiEquity Strategist Kristal.Ji@morganstanley.com +65 6834-6949 Morgan Stanley Asia Limited+Crystal NgEquity Strategist Crystal.Ng@morganstanley.com +852 2239-1468 Gilbert Wong, CFAQuantitative Strategist Gilbert.Wong@morganstanley.com +852 2848-7102 Laura WangEquity Strategist Laura.Wang@morganstanley.com +852 2848-6853 Morgan Stanley India Company Private Limited+Ridham DesaiEquity Strategist Ridham.Desai@morganstanley.com +91 22 6118-2222 Morgan Stanley Australia Limited+Chris NicolEquity Strategist Chris.Nicol@morganstanley.com +61 3 9256-8909 Morgan Stanley & Co. International plc, Seoul Branch+Joon SeokEquity Analyst Joon.Seok@morganstanley.com +82 2 399-4934 Morgan Stanley Taiwan Limited+Terence ChengEquity Analyst Terence.Cheng@morganstanley.com +886 2 2730-2873 Morgan Stanley Asia (Singapore) Pte.+Wilson W Ng, CFAEquity Analyst Wilson.W.Ng@morganstanley.com +65 6834-6345 Morgan Stanley MUFG Securities Co., Ltd.+Sho NakazawaEquity Strategist Sho.Nakazawa@morganstanleymufg.com +81 3 6836-8926 Exhibit 1:Chart of the Fortnight – Distribution of 12mf P/E ratios for MSCI India at end Dec-23 vs. MSCI China at end Jan-21; India has broader base of high valuations, where the China market was polarised between value and high growthSource: FactSet, Morgan Stanley Research Top of the Agenda: Asia and EM equity markets have had a highly divergent start to 2024, consistent with our New Era thesis. This looks for structural outperformance of Japan and India, both driven by nominal GDP and a capex/digitalisation agenda, reinforced by multipolar world de-risking trends. Inside we compare Indian valuations with China's early 2021 peak, while highlighting several macro and geopolitical trends. The next key event for Asia/EM is Indonesia's elections on February 14, which may require a run-off Presidential election on June 26. Indonesia equities have historically fallen in the month after elections. Morgan Stanley does and seeks to do business with companies covered in Morgan Stanley Research. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of Morgan Stanley Research. Investors should consider Morgan Stanley Research as only a single factor in making their investment decision.For analyst certification and other important disclosures, refer to the Disclosure Section, located at...
