Positives of RRR Cut Are Likely to Be Offset by Rising Credit Quality Pressures as Economy Weakens
Following yesterday’s announcement of the Chinese central bank’s required reserve ratio, or RRR, cut of 50 basis points, effective July 5, we retain our fair value estimates for the Chinese banks we cover, as the positives of liquidity injections are largely offset by downward pressures on credit quality, in our view. Chinese banks under our coverage are trading at three-year lows on our valuation level of 0.4-0.8 times forward price/book, except for China Merchants Bank. This is attributable to...INDUSTRIAL AND COMMERCIAL BANK OF CHINA LIMITED is a China-based company principally engaged in the provision of banking and related financial services. The Bank mainly operates three segments, including Corporate Banking segment, Personal Banking segment and Treasury segment. The Corporate Banking segment provides loan, trade financing, deposit, corporate finance, custody and other related financial products and services to enterprises, government agencies and financial institutions. The Personal Banking segment provides loan, deposit, bank card, personal finance and other related financial products and services to individual customers. Treasury segment includes money markets business, securities investment business, self and valet foreign exchange trading and derivative financial instruments business. The Company conducts its businesses within domestic and overseas markets.
Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. The company offer an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors.
Morningstar provides data on approximately 530,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 18 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries and had approximately $185 billion in assets under advisement and management as of June 30, 2016.
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