Investors’ attention redirected to Chinese banking shares, large banks in cyclical rebound – UBS
Investors’ attention redirected to Chinese banking shares, large banks in cyclical rebound – UBS

Investors’ attention redirected to Chinese banking shares, large banks in cyclical rebound – UBS

 

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Investors’ attention has been redirected towards Chinese banking shares, said UBS in a note, after meeting with investors and funds in China and Singapore over the past few weeks.

Chinese banks have elevated after the quarterly result season and long holidays and outperformed the broader Chinese equity markets and large Chinese banks are experiencing a post-pandemic cyclical rebound, said UBS.

China’s monetary policy will likely remain loose in the near term, facilitating short-term outperformance for large Chinese banks with undemanding valuations and high dividends, and secifically, large Chinese banks capable of realizing stronger revenue and profit growth, such as ABC and Bank of China based on their Q1 results, are more likely to outstrip their peers, it said. 

Following the recovery of the consumer finance segment, capital markets and wealth management markets, leading joint-stock banks such as China Merchants Bank, Ping An Bank and Bank of Ningbo will likely hail greater upside in the second half of the year, according to the note.