China's Big Four banks fall out of favour with investors
Shares in Big Four have lost US$70b of value amid concerns over slowdown and bad debts
The world's most profitable banks have never been so unloved by stock investors.
The mainland's Big Four lenders, which reported US$126 billion of earnings in the year to September, sank to the lowest valuations on record in Hong Kong trading this week.
The MSCI China Financials Index dropped to an almost decade low against the global industry benchmark while the market value of Industrial and Commercial Bank of China, the mainland's largest lender, fell below net assets for the first time on Wednesday.
The state-controlled banks are getting squeezed by slower economic growth and rising bad debts just as policymakers open up the financial system to non-government competitors. Their shares have lost US$70 billion of value this year, even as peers in the United States and Europe rally.
The market is concerned about future profitability [in China]
Wells Fargo and JP Morgan Chase have knocked ICBC from its ranking as the world's biggest bank by market value.
"The market is concerned about future profitability [in China]," Diana Choyleva, the head of macroeconomic research at Lombard Street Research, said on Tuesday. "I would not be investing [in] Chinese bank shares just yet. They have further to go."