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Banks, Oil Plays May Top China Stocks this Week

China banks’ results pleased investors last week, and coal and oil energy firms disappointed them, but both sectors are set to rise this week.Banking giant CCB (CICHY) and regional bank CQRC

China banks’ results pleased investors last week, and coal and oil energy firms disappointed them, but both sectors are set to rise this week.

Banking giant CCB (CICHY) and regional bank CQRC (CRCBY) both beat market expectations last Friday. That raised investor confidence that both large and smaller banks as a whole did well last year, according to Jackson Wong, vice president of sales at Tanrich Securities.

Traditional oil and coal producers have taken a backseat lately to sexy picks in the shale oil and gas sector which is favored by government policies. And results from old-line energy companies like oil firms CNOOC (CEO) and Petro China (PTR) as well China Coal (CCOZY) failed to meet expectations last week. But Wong told Equities in an email that “their valuations are at their lowest in a long time, with quarter window dressing approaching, I believe some funds will bargain hunt.”

Another sector with good prospects, he said, involves exports, which should rise along with the recovering U.S. economy. Potential winners include export company Li & Fung (LFUGY) and China Shipping Container Line (CITAY).

The market as a whole may firm up after last week’s dismal showing as Cyprus seems to have found a solution to its debt crisis. On Monday the Hang Seng Index rose 0.6% to 22,251, and the index of Chinese companies increased 0.8% to 10,978. End

DAILY FIX

Hong Kong Blue Chips: +136, +0.6, to 22,251, 3-25-13, Hang Seng Index

Chinese Stocks in Hong Kong: +82, +0.8%, to 10,978, 3-25-13, HSCE Index

Shanghai Stocks: -2, -0.07%, to 2,327, 3-25-13, Shanghai Composite Index.

Chinese Stocks in the U.S.: +1.3, 368.0, 3-22-13, Bank of New York Mellon, ADR Index-China

Insight: Rebounding from last week’s losses, Hong Kong opened 212 points higher but lost some of the gains in thin trading. Big bank CCB (CICHY) reported higher-than-expected profits and its stock rose 2.3%. KGI Research

Quotable: “In the coming week, investors may keep an eye on new developments from Cyprus bailout, as next Monday will be its deadline to propose a range of new measures to raise money. Additionally, a number of blue chips will announce their results including Bank of China, Cheung Kong and Hutchison Whampao etc.” BEA Securities. 3-22-13

Brokerages and analysts cited here have disclaimers on their websites emphasizing their statements are for information only. They do not endorse my blog, and I don’t endorse them.

For a list of Chinese companies sold in the U.S. and information on each company go to http://www.adrbnymellon.com/dr_country_profile.jsp?country=CN

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