Morgan Stanley Identifies Top 'Alpha' Stocks In APAC, One With Potential 28% Upside

The global investment bank Morgan Stanley has recently released a list of top “alpha” stocks in the Asia-Pacific region, which includes a South Korean bank with a potential 28% upside.

What Happened: Morgan Stanley’s list of alpha stocks, released on Apr. 9, includes companies from the Asia-Pacific region, excluding Japan. These stocks, with a market capitalization exceeding $5 billion, were evaluated based on factors such as quality, value, and sentiment, reported CNBC.

One of the top-ranked stock ideas on the list is Hana Financial Group, a South Korean commercial bank. The bank has received an overweight rating from Morgan Stanley, which has also raised its 12-month price target to 71,000 Korean won ($51.2), indicating a potential upside of 28% from its current level.

"Our Korea Financial analyst, Joon Seok … believes large-cap banks are key beneficiaries of the corporate reform theme," the bank said.

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Another stock that Morgan Stanley is bullish on is Novatek Microelectronics, a Taiwanese chipmaker. The bank’s analysts anticipate the stock to outperform due to factors such as the shift to foldable smartphones, market share gains, and a reduction in wafer cost. They also see potential new opportunities from AI ASIC (Application Specific Integrated Circuits) driving a re-rating.

Why It Matters: The selection of alpha stocks in the Asia-Pacific region comes at a time when the global stock market is experiencing significant shifts. Earlier this year, former Treasury Secretary Larry Summers voiced concerns about the market potentially overlooking potential political and social upheavals, despite the ongoing rally.

Meanwhile, Ned Davis Research (NDR) warned that the current market conditions could lead to a correction, although a bear market is not imminent. This was followed by a warning from Paul Dietrich, the chief investment strategist at B. Riley Wealth, who pointed to several indicators in the market signaling a collective warning for stocks.

Despite these warnings, the stock market’s long-term bull rally, now in its 11th year, is poised to continue, with the S&P 500 potentially surging by 34% by the end of 2026, according to Bank of America‘s technical strategist, Stephen Suttmeier.

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