HK Stock Market Move | Chinese bank stocks extend gains in late trading; CCB (00939) hits another new high; BofA says Chinese banks' earnings improving but upside limited.

Chinese bank stocks extended gains in late trading. As of press time, CITIC BANK (00998) rose 4.41% to HK$8.405; Bank Of China (03988) rose 2.69% to HK$6.1; China Construction Bank Corporation (00939) rose 2.63% to HK$10.52; Industrial and Commercial Bank of China (01398) rose 1.47% to HK$7.935. A latest research report from BofA Securities pointed out that Chinese banks' third-quarter earnings improved, driven by investment gains, but the room left for future buffers has decreased. The report noted that H-share banks' third-quarter net profit growth improved from a 0.5% year-on-year increase in the first half to a 1% increase in the first nine months, while pre-provision operating profit growth accelerated from 9.1% to 10.2%. The bank noted that the sector has risen 23.7% year-to-date, outperforming the MSCI China and H-share Financials indices by 43 percentage points and 21 percentage points, respectively. Although Chinese banks should remain relatively resilient when market conditions pull back, after the sector's recent rise to historical highs, the bank believes absolute upside is limited. Agricultural Bank Of China, China Construction Bank Corporation and Industrial and Commercial Bank of China remain its top picks among large banks.