Morgan Stanley raises 2009 growth forecast

Investment bank Morgan Stanley has raised its 2009 GDP growth rate forecast for China to 9 percent from 7 percent earlier. It has also upped its forecast for 2010 to 10 percent from the 8 percent previously, according to a recent report by Morgan Stanley economist Qing Wang.

"This automatically raises our implied earnings view and index multiples for the Hang Seng China Enterprises Index (HSCEI)," Jerry Lou, China strategist of Morgan Stanley, said at a media briefing yesterday.

HSCEI, which tracks the H shares of mainland companies listed in Hong Kong, may rise by 40 percent by the end of the year, while the indices measuring the domestic A share market are likely to rise by higher margins, Lou said.