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How I'm trading China's banks
Beijing-based trader Fredrik Oqvist is focusing on the Chinese banks, on the back of news that the People’s Bank of China will remove the lending rate floor, as economic growth in the country slows. This could depress banking shares and Fredrik's going to wait to make his trading move.
The change removes a floor set at 30 percent below the current 6 per cent benchmark, giving banks freedom to set their own lending rates.
Fredrik says that China’s banks will take a ‘beating’ from the news, as their net interest margin will be under further pressure. It means that large banks with higher exposure to large corporate lending have more to lose and are therefore more exposed.
China’s economy grew 7.5 percent in the second quarter from a year earlier, down from 7.7 percent in the first three months, and is at risk of the weakest expansion in 23 years.
01:05 minutes
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