(March 6): China’s most-shunned sector is getting a rare moment in the sun as investors seek shelter from a rout in the market’s darlings.
The CSI 300 Banks Index has climbed 12% this year and is trading near the highest since 2007 even as price-to-book valuations remain at just over half of its 14-year average. Liquor maker Kweichow Moutai Co., a favorite among investors, is down 21% from a February peak, with 30-day volatility at a two-year high.
Appetite for Chinese bank stocks, long regarded as perennial laggards, is growing as investors hunt for cheaper parts of the market to escape lofty valuations in growth shares spurred by liquidity-fueled gains this year. That also comes as investors recast expectations for the year amid a surge in U.S. sovereign bonds that’s sent global bank shares higher.