Top Chi­nese banks’ shares lose $15B

Northwest Arkansas Democrat-Gazette - - BUSINESS & FARM -

BEI­JING — In­dus­trial & Com­mer­cial Bank of China Ltd., Agri­cul­tural Bank of China Ltd. and Bank of China Ltd. posted their worst weeks since at least June 2016, while China Con­struc­tion Bank Corp. fell for a fifth con­sec­u­tive week.

The Chi­nese bank­ing gi­ants were among the big­gest de­clin­ers on a gauge of Chi­nese shares traded in Hong Kong, los­ing a com­bined $15 bil­lion in value.

The losses are a turn­around for the Big Four lenders, which ral­lied along with the Hong Kong mar­ket ear­lier this year as con­cerns over bad debt gave way to op­ti­mism over im­prov­ing eco­nomic growth and cor­po­rate profits. While an­a­lysts say lit­tle has changed for the Chi­nese banks, they are also es­pe­cially vul­ner­a­ble to a correction; stock­hold­ers can sell now with­out for­feit­ing the banks’ up­com­ing div­i­dends.

“Their fun­da­men­tals haven’t got­ten worse; they’re still im­prov­ing,” said Cas­tor Pang, head of re­search at CorePa­cific Ya­maichi HK. “But in the short term, the fo­cus isn’t on Chi­nese banks.”

In con­trast, Ping An In­sur­ance Group Co. is among the top per­form­ers this week, while Peo­ple’s In­sur­ance Com­pany of China’s Prop­erty & Ca­su­alty Co. had its best week since Novem­ber 2016. Funds may have ro­tated into th­ese shares be­cause in­sur­ers will ben­e­fit from ris­ing global bond yields, said Peter So, co-head of re­search at CCB In­ter­na­tional Securities in Hong Kong. Euro­pean and U.S. banks also gained this week as in­vestors ex­pect for mone­tary tight­en­ing in both re­gions.

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