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2009-6-30 12:42:00 p.m. HKT, XFNA
DJ MARKET TALK: China Banks Strong But Lending Frenzy Can't Last
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| 1230 [Dow Jones] China banks continue to outperform with all 6 H-share banks rising more than HSI +0.7%, led by Bank of Communications' (3328.HK) 4.5% gain to HK$8.78. Sector already outperformed in June on sector re-rating underpinned by easing concerns about narrowing NIM, rising NPL. Still, Francis Lun of Fulbright Securities notes record-breaking pace of banks lending, with China banks combined lending out some CNY1 trillion each month so far this year; says such lending frenzy merely pushes back problem, not fixing problems. View echoed by HK-based fund manager, who says, "the Chinese banking system can't keep doing a trillion a month without blowing itself up." China Construction Bank (0939.HK) +1.2% at HK$6.11, ICBC (1398.HK) +2.2% at HK$5.49, China Merchants Bank (3968.HK) +2.1% at HK$18.10. (RLI) Contact us in Hong Kong. 852 2802 7002; MarketTalk@dowjones.com
(Delayed by 1 hour)
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