A ceasefire in the Iran war signals a path toward a de-escalation of geopolitical tensions — and an opportunity to re-engage in Asia stocks. That’s according to Morgan Stanley’s Singapore and Hong Kong-based equity strategists, who expect investors to return to themes from earlier in the year around the artificial intelligence supply chain. They also expect greater interest in more recent themes. “Regardless of the reopening of the Strait of Hormuz, spending on energy security, defense and renewables will likely remain robust,” the strategists said in an April 8 note. Morgan Stanley sees broad upside for China stocks this year, albeit with “high uncertainty” in the months ahead. Following news Wednesday morning Asia time of a two-week ceasefire , the mainland China CSI 300 stock index and the Hang Seng Index rose over 4% and 3%, respectively, in a holiday-shortened week. To identify stock opportunities, the strategists screened for Asia Pacific companies generating more than 5% of their revenue from the Middle East, and which had fallen by more than 5% from the end of February to April 7. “While the Middle East conflict may be just one driver of their respective share price corrections, we see the list as potentially benefiting from a de-escalation and gradual improvement in supply chains,” the report said. The screen looked at re …
