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Trade idea: Chinese banks now "less risky"
Beijing-based trader Fredrik Oqvist, Founder of ChinaRAI, is looking to focus today's trade on the Chinese banking sector. He says the latest comments from China's regulatory commission mean they are now "less risky" investments.
In particular, he will be looking at the Bank of China (BOC), the Industrial and Commercial Bank of China (ICBC) and the Agricultural Bank of China (ABC).
According to Fredrik, the Chairman of China's Banking Regulatory Commission said they will move to re-classify wealth-management products (WMPs) into direct financing tools for debt. This changes, he says, the implicit guarantees that the banks have from the institutions to the investors. This means there'll be less risk in the Chinese banking sector should the news be confirmed.
Fredrik says we have already seen stocks move up 2% on the news, and is expecting a 5% return.
01:09 minutes
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