Guest Column

Banks, property and large caps to shine

  • Published 17 Sep 2009

Too many investors are preoccupied with short-term market fluctuations. But with earnings in certain sectors promising to stay robust into 2010, some stocks are still fundamentally attractive.

Over the past 12 months, we have seen in China a massive shift in policy as a result of what happened on the export side. Very clearly, the policy changes have been focused on the domestic attributes of the Chinese economy (i.e. investment and consumption). In terms of sectors, we continue to favour banks. Within the sector, our top picks are China Construction Bank, Bank of China, Bank of China (Hong Kong) and ICBC (Asia). Despite good loan growth numbers, improving net interest margin (NIM) and solid results announced recently, banks are still priced at a discount relative to the aggregate market, though they have pared back some of this discount recently. Should there be a moderate tightening of liquidity, it would also on the whole be positive for the banks’ margin expansion and medium-term asset quality.

Issue icon

Latest Issue

12 Jan 2012

Browse the archive

Get two weeks free trial Subscribe now to access all of China Confidential

China Confidential Funds

China Confidential Funds, a new research service launched by FT China Confidential, is dedicated to illuminating the mainland fund industry. Our team of fund industry experts in Shanghai search out the interesting trends in fund performance, strategy, interactions with overseas funds, regulatory changes, distribution and management. We also use a proprietary system to track the emerging flows of Chinese money. Click here to find out more.

Find out more