Ashmore's Dickson: Chinese banks 'unjustifiably cheap'

Worries over the state of China's shadow banking sector and overheating property market have contributed to disappointing performance from its equity markets this year. But China is cleaning up its act and some banks are 'unjustifiably cheap', argues Julie Dickson from Ashmore.

China's equity markets had a disappointing start to the year. Both the Shanghai Composite and Hang Seng underperformed the FTSE 100, but sentiment has recently picked up and the markets have risen again. Over the year to 8 August the Hang Seng has returned 7.6% compared to the FTSE's 4.9%. Opening up The Chinese government is making some changes which could mean better performance in future. Policymakers are now awarding more flexible investment licences, called renminbi qualified foreign institutional investor schemes (RQFII), to asset managers based outside of Hong Kong and Singapor...