Bank of China shares defied a drop in the broader market to end 1.68 per cent higher in Hong Kong yesterday after analysts raised their targets following the bank's earnings report.
The stock closed 4 HK cents up at HK$2.42 as investors welcomed the bank's higher than expected dividend payout announced on Tuesday. The Hang Seng Index fell 2.07 per cent.
'The payout ratio of 51 per cent of profit, against 45 per cent in 2007, is a positive signal for confidence and capital position,' said Citigroup Global Markets analyst Simon Ho. 'Bank of China remains inexpensive and is one of our preferred stocks in the sector.'
Deutsche Bank raised its price target for Bank of China to HK$2.58 from HK$2.47. Macquarie Securities lifted its target to HK$2.59 from HK$2.50, while UBS increased it to HK$3.50 from HK$3.35.
However, Bank of China's Shanghai-listed shares fell 2.31 per cent to 3.39 yuan (HK$3.85) as investors there were more concerned about the banking industry's prospects.
The bank's net profit rose 14.4 per cent to 64.4 billion yuan last year, the slowest in three years.
Moody's Investors Service analyst Richard Lung said: 'Although relatively insulated, China's banking industry will not escape collateral damage from the global economic recession.'
