Banks Set to Lead China Stocks Higher

Gene Linn |

Banks Set to Lead China Stocks HigherChina stocks ended a volatile week higher on Friday, with banks set to lead the market to further gains.

Global stocks started the week in a swoon, after the US reported disappointing job results and the European debt crisis heightened. But strong results from US aluminum giant Alcoa (AA) kicked off a mid-week rally.

Hong Kong's Hang Seng Index ended the week 0.06% higher at 20,701, and the index of Chinese companies rose 1.8% to 10,937. Turnover was light throughout the week, but increased a bit Friday.

In China news, GDP growth posted a higher-than-expected drop to 8.1%, raising expectations that China would implement moves to stimulate growth.

Those moves, such as cutting banks' required reserve ratio, would benefit the banking sector. And that sector got more good news Friday when China announced the city of Shenzhen would launch financial reform that would attract overseas RMB holdings.

“I think the new measures will recycle offshore RMB so it will become onshore RMB, and that will help banks,” said Peter So, managing director and co-head of research at CCB International.

One major benefactor would BOC Hong Kong (BHKLY) because it handles the bulk of RMB trade in Hong Kong, So told Equities.

He expects banks to lead the Hang Seng to 21,700, possibly next week.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to:


Emerging Growth

Beleave Inc.

Beleave Inc is a biotech company. The Company is engaged in the production of medical marijuana under the Marihuana for Medical Purposes Regulations outlined by Health Canada.

Private Markets

Initial State

Initial State is an Internet of Things (IoT) data analytics & data management platform company. We turn sensor and event data into information that matters by making it easy to…

MyForce, Inc.

As parents, we constantly worry about the safety of our loved ones. The media bombards us with incidents from across the nation school shootings, frequent assaults on campuses, and crimes…