Bad News Mounts for Chinese Banks. Funds Grow More Bullish

China’s banks, already saddled with mounting bad debt, face the risk of sagging profit growth after an interest-rate cut slashed their margins on loans.

The twist: some investors are getting more optimistic, not less, about the outlook for the industry’s shares. 

Victoria Mio, chief investment officer for China at Robeco Hong Kong Ltd., whose parent company oversees about 237 billion euros ($294 billion), said Nov. 21 that bank stocks were very attractive because they were priced at levels that assumed an economic “hard landing.” 

Read more: Industrial & Commercial Bank of China Ltd. (601398) led banking shares higher in Hong Kong, closing up 2.4 percent, the biggest gain in more than two months. (Read More)