Stock Market Interpretation: Equity Of Chinese Banks Is Becoming Hot Potato.

After the US bank and Goldman Sachs, Citigroup is the latest foreign investment bank to join the collective selling of Chinese banks.

But it may not be the last one.

The "single seedling" HSBC attracted much attention.

According to a previous article in Wall Street, Citigroup is negotiating to sell 20% stake in China's Guangdong Development Bank, which could be reached in the coming months.

At the beginning of this month, Deutsche Bank said it might sell its stake in Huaxia Bank worth 21 billion 900 million yuan (US $3 billion 400 million).

Although additional capital requirements have allowed foreign banks to sell shares held by Chinese banks, HSBC has yet to give any hints that it plans to sell its 19.9% stake in Bank of communications, but instead "overweight" China.

HSBC said it will increase 4000 jobs in the Pearl River Delta in the next three or four years.

Ma Kunpeng, an analyst with state securities, believes that the deep cooperation between HSBC and Bank of China looks "unbreakable".

In 2004, 14 billion 461 million yuan was invested in the Bank of communications and gained 19.9% of the shares. It was the largest amount of foreign banks' participation in the mainland commercial banks at that time.

However, due to the economic slowdown and the increase in bad rates, the market expects that profits will decline this year.

Bloomberg statistics show that global banks, including Bank of America and Goldman Sachs, have stripped at least 14 billion of the shares of Bank of China since 2012.

For example, Hang Seng Bank, HSBC holding this year, sold 5% Industrial Bank.

The Spanish foreign bank (BBVA) clears the shares of CITIC Bank.

"HSBC is different, because Asia and China are them.

A large part of it. "

Cao Zhu, an analyst with Guotai Junan Securities, told Bloomberg.

"HSBC's stake in the bank has brought considerable dividends, customer groups and improved brand awareness."

HSBC CEO Stuart Gulliver said this month that he is still optimistic about China's economy and will increase investment in China.

The bank's plan allows HSBC to nominate a vice chairman of the board.

Bloomberg quoted people familiar with the matter in August.

The unanimous view of the market for China's banking industry is that whether large banks or small and medium sized banks are holding shares, with the growth of China's loan and the current situation of China's economic downturn, the sharp rise in bad debts or bad debts will become a trend in the coming period. This will arouse their concerns about the future profitability of China's banking industry.

"Global banks are cutting unnecessary positions, otherwise these banks will not be able to concentrate their limited resources on core businesses."

Cao Zhu, an analyst at Guotai Junan Securities, said that selling is not a bad move, because foreign banks "have gained the best time in China's banking industry."

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The people's Bank of China announced that since October 24, 2015, the benchmark interest rate for Renminbi deposits and loans of financial institutions has been lowered, while the reserve requirement rate of Renminbi for financial institutions has been lowered.

Among them, the annual benchmark lending rate of financial institutions has been reduced by 0.25 percentage points to 4.35%; the one-year deposit benchmark interest rate has dropped by 0.25 percentage points to 1.5%; the other grades of loans and deposit benchmark interest rates, the people's Bank of China have adjusted the lending rates of financial institutions, and the interest rate of individual housing provident fund has remained unchanged.

Richard Cochinos of Citigroup said:

The central bank's actions are somewhat unexpected today, but the market is not entirely without expectations.

We believe that easing is a systematic and controlled response to China's slowdown in economic growth, rather than a response to the impact of the new economy.

One day after the ECB's dovish stance, the PBOC cut interest rates by 25 basis points and lowered the deposit reserve ratio by 50 basis points.

It seems that loose monetary policy has brought loose monetary policy.

Our economic team has always predicted that China will further relax its policy, which is only a question of time.

Unlike other major central banks, the Central Bank of China has no fixed time to announce monetary policy.

But that does not mean that China's central bank has no way to announce its policy.

Before today, the central bank announced the six reduction of interest rates, the latest in August 25th.

This view helps us explain G10's indifference to the central bank's interest rate cut.

At present, compared with its performance in April, July and August, the Australian dollar / dollar is very cold.

Obviously, China's monetary stimulus is good for Japan and Australia, but we are also very cautious and do not want to be too optimistic.

Today's rate cut was announced before the fifth Plenary Session of the 18th CPC Central Committee.

The previous rate cut did not reverse the economic slowdown.

In addition, the fifth plenary session will announce GDP targets for the next five years (currently 7%, expected to be lowered) and other financial plans and targets.

It is difficult for the market to pursue price trends until we know the information and understand the expected benchmark situation in China.

The main driving force behind emerging markets in Asia is economic growth and trade weakness.

Therefore, we should be cautious.

Policy adjustments may weaken the impact of further economic slowdown.