Shares of most Chinese banks have rallied sharply in recent days, fueled by increasing investor confidence in the domestic market and better-than-expected industry earnings, experts told the Global Times Thursday.
The total market value of the 16 publicly listed banks trading on mainland bourses gained more than 700 billion yuan ($112.48 billion) over the 35-trading-day period between December 4 and Thursday, making banking one of the A-share market's best performing sectors over the period. Ping An Bank Co, Industrial Bank Co and China Minsheng Banking Corp stood among the best performers, seeing the prices of their shares rising 56.64 percent, 49.72 percent and 47.37 percent respectively over the past seven trading weeks.
According to She Minhua, a banking stock analyst at Zhong De Securities, the banking sector has outperformed market benchmarks and has been a magnet for capital in recent days since investors regard it as a safe place to put their money as stocks advance amid indicators of gradual economic recovery and government efforts to strengthen the unruly market.
"Investors' expectations for the Chinese equity market have been gradually improving since regulators slowed down approvals on initial public offerings (IPOs)," said She. "Many believe that the stock market has room to grow before regulators again allow enterprises to issue IPOs in any large quantity. Essentially, capital holders are now looking for promising areas to invest in and banking stocks, which many view as being undervalued following drops seen last year, have made excellent targets."
Beijing fantasy emerges in dense fog
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