Asian markets have had a mixed start to the year — with investors looking keenly at India, Japan and increasingly China. Japan’s Nikkei 225 index is up nearly 20% year-to-date and around 46% higher in the past year. India’s Nifty 50 index is up close to 30%, while China’s CSI 300 index is down nearly 14.5% in the last 12 months. Looking ahead, those searching for pockets of opportunities in the region can look to Morgan Stanley’s selection of “alpha” stocks. Alpha stocks refer to those with the ability to beat the market. The stocks, which are from Asia-Pacific excluding Japan, have a market capitalization of over $5 billion and were ranked on factors such as quality, value and sentiment, the investment bank’s analysts wrote in an Apr. 9 note. Among the “notable top-ranked stock ideas” on its list is South Korean commercial bank Hana Financial Group. The bank has an overweight rating on the stock and just raised its 12-month price target to 71,000 Korean won ($51.2), reflecting an 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,” Morgan Stanley’s analysts said. Joon “expects the company’s securities business to turn around and further buybacks to boost shareholder returns,” the bank said. Called the “Corporate Value-up Program,” South Korea’s corporate reforms were unveiled by the Financial Services Commission earlier in the year. The measures are designed to prioritize shareholder returns through incentives including tax benefits, and “encourage listed companies to voluntarily set up and disclose valuation enhancement plans.” Another top stock that Morgan Stanley is overweight on is Taiwanese chipmaker Novatek Microelectronics . Analysts at the bank expect the stock “outperform due to migration to foldable smartphones, market share gains, and reduction in wafer cost. New opportunities from AI ASIC (Application Specific Integrated Circuits) could also drive re-rating.” Here are 10 stocks from Morgan Stanley’s full list of top overweight-rated stocks for April. Notable bottom-ranked stocks Morgan Stanley named its “notable bottom-ranked stock ideas.” Australian upstream oil and gas company Santos was among the stocks on the list, as the bank’s analysts see “better risk-reward downstream in refining and retail.” Indian paint supplier Berger Paints also appeared on the list given “rising competition.” This “increases risks to margins and should reduce the premium commanded by paint companies relative to the overall market and other consumer stocks,” the analysts explained. — CNBC’s Michael Bloom contributed to this report.
