The Big 4 SOE banks of the PRC surged in Shanghai on reports of government intervention to prop up prices before this weekend’s annual policy meeting. While the Shanghai Composite rose a mere .5%, the Shanghai 50, dominated by financials and energy, increased by 3.36%. The outsize volume for the Big 4 Banks reinforces the support comments made by anonymous sources.
The gains in Shanghai, from over 2% to over 4%, were more robust than those in Hong Kong, none of which exceeded 2%. Still, with the bearish movements in Shanghai and Hong Kong, the stocks are generally well below the start of the year with the exception of Agricultural Bank of China, on the Shanghai exchange.
Despite today’s changes and the rally from the 52-week lows, these shares have tumbled hard from their 52-week highs. These 4 banks are among the top 10 in the world in terms of assets. Even after today’s Shanghai shoot, the p/e’s of a couple of their peers in the top 10, BNP Paribas, p/e of 8.86; JP Morgan Chase, p/e 9.9 demonstrate the continued market skepticism toward these Banks and a China stimulus save.
The 3rd quarter’s growth in NPL’s and flat to negative growth in net earnings reinforce this skepticism.
None of these banks have yet to report annual earnings. Based on history, the banks will be reporting in late April.
Bank Last Annual Release
Agricultural Bank of China 4/28/2015
China Construction Bank 4/29/2015
Bank of China 4/30/2015
Industrial & Commercial Bank 5/5/2015