While the China technology story hasn’t changed enough to warrant major changes to portfolios, local stock investors are now being encouraged to take a more conservative turn as they gear up for the second half. “We caution against a potential volatility surge in the next month or two,” a team led by Morgan Stanley’s chief China equity strategist Laura Wang said in a report Thursday. The analysts noted that sentiment toward mainland Chinese stocks, known as “A Shares,” dropped in the past week as Chinese policymakers have so far failed to bolster growth, nor are they expected to in a Politburo meeting later this month. In addition, the deadline for U.S. trade deals with most countries looms on July 9, with the 90-day tariff truce with China set to expire in mid-August. Mainland China stocks rose slightly last week, while more globally connected and tech-dominated Hong Kong stocks fell. Dividend plays While continuing to endorse some AI names, Morgan Stanley’s Wang on Thursday also recommended “maintaining some exposure to dividend yield plays.” One of Morgan Stanley’s favored picks for the near term is Hong Kong-listed Chinese insurer PICC P & C , which analyst Rick Zhao highlighted in June as offering a dividend yield of 4.5% and the potential to benefit from growth in auto insurance. The Wall Street investment bank swapped …
