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2009-6-15 09:40:00 a.m. HKT, XFNA
DJ MARKET TALK: Further Re-Rating Possible For China Banks -DBS
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| 0929 [Dow Jones] DBS Vickers tips "further re-rating possible" for Chinese banks; following conference calls with some banks, believes asset quality should remain benign this year and next. Says China's economy bottomed in 1Q09 thanks to aggressive lending, fiscal stimulus; NIMs should trough in 1Q09 or 2Q09, with any further contraction in 2Q09 likely minimal. House cuts NPL assumptions for Chinese banks by 9%, 21% for FY09-10, raises sector earnings forecasts by 11%, 23%, target prices for sector raised by 17% on average. Top pick now China Construction Bank (0939.HK), also likes Bank of China (3988.HK), Citic Bank (0998.HK). All 3 rated Buy, target prices HK$6.90, HK$4.50, HK$5.90 respectively. CCB ended +2.9% at HK$5.62 Friday. (RLI) Contact us in Hong Kong. 852 2802 7002; MarketTalk@dowjones.com
(Delayed by 1 hour)
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