80% China’s bank shares fall below net asset value; scepticism prevails with reported figures and NPL problem
December 29, 2013 Leave a comment
80% China’s bank shares fall below net asset value
Staff Reporter
2013-12-29
Although the banking industry is one of the most profitable sectors in China, investors have suffered losses in the stock market as more than 80% of banks’ shares listed in China A-shares closed at prices that were lower than their net asset value on exchange on Thursday.Market observers stated that the downtrend was caused by a slow market flow, as well as online financial payment services, which had pressured stock growth in the banking sector.
On Dec. 26, banks listed on the A-share market, such as the Industrial and Commercial Bank of China (ICBC), the Bank of China, the Agricultural Bank of China and the China Construction Bank had seen stock prices drop by more than 1%.
ICBC closed at 3.55 yuan (US$0.584) and dropped briefly to 3.53 yuan (US$0.581) during the middle of the trading day on Thursday. Data showed that the company’s net asset value was recorded at 3.51 yuan (US$0.578) for the first three quarters of this year.
Among the 16 banking stocks listed on China’s A-share market, only ICBC, the Bank of Ningbo and the Minsheng Banking Corporation did not drop below their net asset value. Among the nation’s four major banks, ICBC was the only one whose prices remained above its net asset value.
The continuing decline was also a result of the insufficient market liquidity at the end of the year and the capital poured in by the central bank has not done a lot to help stock prices, an analyst said.
Another analyst Yang Delong was of the view that bank stocks were more profitable in the A-share market. However, the growing internet payment sector had made it harder for banks to attract deposits.
The net revenue growth rate of listed banks was projected to be 10% for 2014, a market analyst pointed out.
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