Morgan Stanley remains optimistic on Korean economy
The Chinese economy will grow 9 percent this year ― far above the government’s 7.5 percent prediction ― a chief economist of Morgan Stanley said Thursday during her trip to Seoul.
“The actual growth has always been higher than the government’s target. We believe that this year, it will be no different,” said Helen Qiao, the investment bank’s chief greater China economist.
Qiao said that Morgan Stanley’s forecast exceeds the market’s consensus of 8.5 percent.
While acknowledging the gap between the two forecasts isn’t large, Qiao said that the different point made in Morgan Stanley’s forecast is that China’s growth rebound
The Hong-Kong based economist who joined the investment bank in 2011 was firm when she said there would be no hard landing this year.
A graph provided by Qiao showed that the actual real GDP growth rate exceeded the government’s target every single year since 2000. The government set the target at 8 percent between 2005 and 2011, and in 2007, the actual rate was nearly double the target at 14.2 percent.
Concerns over a hard landing for China peaked in late 2011 and earlier this year, but the market has become increasingly bullish about the outlook for the world’s second largest economy as the government began showing signs of easing its tight credit policy.
On the same day, Shawn Kim, the newly appointed head of Korea research, presented the outlook for the Korean equity market.
Kim suggested 2,200 as the KOSPI target, adding that the Seoul bourse was still undervalued.
He said that for the market to be re-rated, more Korean firms need to pay out dividends, which isn’t easy under the corporate governance of chaebol.