摩根斯丹利-印度股票策略-什么是流动性？20170808-morganstanley-indiaequitystrategy：whatisliquidity.pdfVIP

August 8, 2017 04:15 AM GMT MORGAN STANLEY INDIA O MPANY PRIVAT E LIMIT ED+ IInnddiiaa EEqquuiittyy SSttrraatteeggyy Ridham Desai EQUITY ST RAT EG IST Ridham.Desai@morganst +91 22 6118-2222 What is Liquidity? Sheela Rat hi EQUITY ST RAT EG IST S heela.Rat hi@morganst +91 22 6118-2224 The ongoing commentary in the market is that liquidity is driving up share prices rather than fundamentals. What exactly is liquidity? Liquidity is not institutional flows, for sure. If anything, institutional flows lag share prices, and liquidity is mostly a coincident indicator. In practice, flows are always net ero, so looking at one side of a trade, such as what institutions are doing in the market, is flawed. Liquidity, in our view, is the relative force between the bid and the offer. If the bid is stronger than the offer, then liquidity is judged to be good, and share prices rise and vice versa. The source of liquidity is confidence in growth and macro stability. Where such confidence comes from is a mystery to market participants using reported data to understand share prices, as this confidence is about the future and not about trailing data. That said, repor