Story of the day
China banks are at their best performance in 10 years, and we believe the positive momentum will carry on for the next few months.
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What does this mean for your portfolio?
The current valuation of HK-listed China banks offers good risk-reward. DBS Group Research prefers banks with better asset quality and those that are in a stronger position to deal with NIM pressure.
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We like these:
Banks with better asset quality
Our top pick is Postal Savings Bank of China for its strong position in retail banking, which leads to less NIM and NPL pressure.
We also like China Merchants Bank (CMB) as it offers higher ROE than its peers. We expect CMB to strengthen its ROE advantage with its multi-pronged approach to acquire more wealth management clients.
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