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Thursday, January 14, 2010

Chinese banks are a disaster

An excellent piece in the Financial Times highlighted the growing discrepancy in global bank share valuations. As the credit crisis unfolded and U.S. banks tumbled Chinese banks have continued to thrive.

At the height of the equity market bubble in 2000 U.S. banks ranked as 5 of top 6 most expensive in terms of price to book value. As money has poured into emerging markets over the last 10 years Chinese banks have seen unprecedented growth. Valuations have ballooned as well. Chinese banks now own 5 of the top 6 positions in terms of valuations...

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