--- title: "Morgan Stanley: Funds are reallocating Chinese stocks, expecting liquidity improvement in Hong Kong stocks in August, recommending buying on dips" type: "News" locale: "en" url: "https://longbridge.com/en/news/292288502.md" description: "Morgan Stanley released a report stating that financing short covering and inflows from the south have helped Hong Kong stocks regain momentum; it is expected that the market environment in August will further improve, leading to a better recovery. The current extremely low allocation means that now is the time to gradually increase positions. Morgan Stanley pointed out that global investors' interest in Chinese stocks is rising, hence it is expected that funds will gradually be reallocated to Chinese stocks in the coming months. Considering the positions are extremely low, it is recommended to gradually accumulate at this time. Morgan Stanley stated that the Hong Kong stock market has laid the groundwork for a significant recovery in August, mainly due to factors including the confirmation of the price war's impact on e-commerce profits having peaked in the second quarter; further progress in the commercialization prospects of artificial intelligence (AI); and the pressure from the unlocking of IPO shares in July is likely to be largely digested. However, for the market to see a further significant rebound, domestic earnings expectations must show signs of bottoming out, and improvements in AI commercialization prospects are necessary. External factors must also be clarified through a more defined Federal Reserve policy path, further stabilization of interest rates and bond yields, as well as major U.S. technology companies confirming planned capital expenditure expansions, and the de-leveraging pressure in high-leverage market sectors during the summer being contained" datetime: "2026-07-10T08:01:03.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/292288502.md) - [en](https://longbridge.com/en/news/292288502.md) - [zh-HK](https://longbridge.com/zh-HK/news/292288502.md) --- # Morgan Stanley: Funds are reallocating Chinese stocks, expecting liquidity improvement in Hong Kong stocks in August, recommending buying on dips According to the Zhitong Finance APP, Morgan Stanley released a report stating that short covering and inflows from southbound funds have helped Hong Kong stocks regain momentum; it is expected that the market environment will further improve in August, leading to a better recovery, and the current extremely low allocation means that now is the time to gradually increase positions. Morgan Stanley pointed out that global investors' interest in Chinese stocks is rising, thus it is expected that funds will gradually be reallocated to Chinese stocks in the coming months. Considering the positions are extremely low, it is recommended to gradually accumulate at this time. Morgan Stanley stated that the Hong Kong stock market has laid the groundwork for a significant recovery in August, mainly due to factors including the confirmation of the impact of the price war on e-commerce profits peaking in the second quarter; further progress in the commercialization prospects of artificial intelligence (AI); and the pressure from the unlocking of IPO shares in July is likely to be largely digested. However, for the market to see a further significant rebound, there must be signs of a bottoming out in the correction of profit expectations domestically, as well as improvements in the commercialization prospects of AI. External factors must be clarified through a more definitive Federal Reserve policy path, further stabilization of interest rates and bond yields, confirmation of planned capital expenditure expansions by major U.S. tech companies, and the containment of deleveraging pressures in high-leverage market sectors during the summer ### Related Stocks - [MS.US](https://longbridge.com/en/quote/MS.US.md) - [MS-O.US](https://longbridge.com/en/quote/MS-O.US.md) - [MS-Q.US](https://longbridge.com/en/quote/MS-Q.US.md) - [MS-E.US](https://longbridge.com/en/quote/MS-E.US.md) - [MS-I.US](https://longbridge.com/en/quote/MS-I.US.md) - [MS-L.US](https://longbridge.com/en/quote/MS-L.US.md) - [MS-P.US](https://longbridge.com/en/quote/MS-P.US.md) - [MS-A.US](https://longbridge.com/en/quote/MS-A.US.md) - [MS-F.US](https://longbridge.com/en/quote/MS-F.US.md) - [MS-K.US](https://longbridge.com/en/quote/MS-K.US.md) ## Related News & Research - [12:12 ETXSparks Introduces the AI Operating Model, Turning AI From a Pilot into How the Business Runs](https://longbridge.com/en/news/291958296.md) - [5 top artificial intelligence (AI) stocks for the second half of 2026](https://longbridge.com/en/news/292055151.md) - [MeltFlex AI Interior Design Tool Passes 213,000 Users Worldwide](https://longbridge.com/en/news/292099142.md) - [This AI shortcut could destroy the industry's profits](https://longbridge.com/en/news/292041141.md) - [Octozi Raises $3M in Seed Funding to bring Agentic AI to Clinical Development](https://longbridge.com/en/news/291939959.md)