Emerging market stocks may soon bottom out in the current bear cycle, analysts at Morgan Stanley (NYSE:MS) believe.

As a result, the bank’s economists, including strategist Jonathan Garner, changed their recommendation for emerging economies and Asia excluding Japan to “over the market” from “at the market”, writes Bloomberg.

The MSCI EM Index has fallen 26% since the beginning of the year amid a strengthening dollar and tight measures to contain the coronavirus pandemic in China. Morgan Stanley expects the indicator to rise by 12% by June next year.

“A lot of firewood has already been broken, and it’s time to plant seedlings for the next cycle,” the bank’s analysts wrote.

The experts also improved their recommendations for shares of South Korea and Taiwan, as well as for shares of semiconductor and technological equipment manufacturers.

In a separate announcement, analysts at Morgan Stanley raised their recommendations for Korean microchip supplier SK Hynix Inc. (KS:000660), Apple Parts Supplier (NASDAQ:AAPL) LG Display Co. (SPB: LPL) and Taiwanese AUO Corp. In their opinion, shares of Taiwan Semiconductor Manufacturing Co. are among the most promising objects for investment.

At the same time, experts downgraded their recommendations for markets showing outperforming dynamics this year, moving the stocks of companies in Indonesia and Singapore to the “at the market” category.