What bargains? China’s cheapest stocks are valuation trap as banks lose margin protection

Chinese banking stocks, already the cheapest among all sectors, may see their share prices beaten down more, as a new market-based way to price loans is set to take away a shield that protected their profit margins for decades.As of this week, commercial lenders must link the loan prime rate to their funding costs from the money market. It is a move aimed to lower borrowing costs for companies and support economic growth.But it comes at the cost of banks’ profits, as net interest margins – or…

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