- RMB starting to appreciate post strong trade balance.
- Chinese Banks leading the A share market higher on divergently positive volumes.
- Property results in May implying risks more than manageable
- Trust finance risks dissapating
- Trade strength and EU stimulous implying outlook improving for largest and riskiest portion of NPLs (manufacturing)
- Further rumours of a broader RRR cut over the weekend.
- Options traders starting to open positions on the Chinese Banks betting on a significant rally with call strikes 10% higher than current prices trading at 4.3 points more than equivalent puts. This divergence is the highest level in 3 years in many cases.
BUY Agricultural Bank (1288 HK)
BUY BOC (3988 HK)
BUY ICBC (1398 HK)
