On Monday, Morgan Stanley analyst Jonathan Garner said his portfolio remains overweight on Japan, China and India. He kept the Asia-Pacific ex-Japan region at equal weight and underweighted emerging markets because he anticipates a recession in Brazil.

Garner forecast the most upside for the Chinese indices. He boosted his target price for the Hang Seng Index 14.3% to 30,000 from 26,800. The MSCI China Index target climbed 13% to 88 from 75, and the HSCEI was lifted off its old target price of 12,500 by 12% to 15,000.

The revisions were due to raising the target price/earnings ratios for these indices, which Garner believes will continue to “benefit from a spillover of the A share investors’ bullish sentiment via the Hong Kong-China stock connect program.” In addition, “China onshore investor purchases are likely to accelerate further given Hong Kong-listed stocks trade at a substantial valuation discount to A shares. He said he now preferred The Hang Seng, HSCEI & MSCI China to China A.

The firm raised its target for Japan’s Topix Index to 1,740, a 9.5% increase over its old target price of 1,680. Garner also slightly raised his earnings estimates for the index, which he now expects to return earnings per share of 103.2 yen, a 15.9% year-over-year increase for calendar year 2015, and 114.8 yen, or a 11.2% increase, for 2016.

“Our upgrade is mainly due to a large improvement in the Japan Economy Watcher Index (one of our top down regression model factors),” said Garner, “which is at 53.4 currently (March 2015) versus 44.0 in November 2014.”

His estimate for the MSCI Asia Pacific ex-Japan index slipped one point to 535.

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