On Asia: Asian banks are bad business
A typhoon was set to crash over Hong Kong on Friday and the territory was engulfed in a giant cloud of rain and wind. Thankfully, the citizens of this technology-mad city, where people turn on the air-conditioning from the car with their mobile phone, had taken hi-tech precautions. Most windows were protected by sturdy crosses of sticky tape....
Expect a similarly flimsy protection when the next stock market cyclone floods the Hong Kong and New York investment community. I am of course talking about the much-awaited listings of two of China's biggest state-owned banks, Bank of China and China Construction Bank.
Unlike the meteorological storms, which are rather difficult to predict, investors should be able to detect exactly where China's banking typhoon is heading - their pockets.
The two lenders are in a rush to list at the beginning of next year and their busy-bee investment banks are plotting how to convince international fund managers and Hong Kong retail investors to take the clearly illogical decision of subscribing for the initial public offerings.
Bad loans, the bane of Chinese banks' balance sheets, are coming down fast, they say. Yesterday BoC bravely claimed they were less than six per cent of the total, an astounding reduction considering they were in double-digit figures a few months ago.
Systems and operations are being dramatically improved and will only get better once the "strategic investors" (Citigroup for CCB and a coalition of the willing for BoC) teach the Chinese how to do it.
All that, plus, hopefully, another bout of "China fever" across international capital markets at the beginning of 2005, and BoC and CCB should be able to raise the $16bn or so they are seeking from grateful stockmarket investors. Well, that's the theory at least.
Not to be too negative, I think the current maelstrom of nod and winks, selective disclosure and half-baked "high-level briefings" for investors and the press, has a positive side. It is good that Chinese financial institutions - bred in a culture of waste and inefficient lending - are being economical even if it is with the truth.
I spare you the technical discussions as to whether the reduction in bad loans is real (or have they just lent more?), whether the accounts are to be trusted (ever tried "sampling" records from 27,500 branches?) or the management is any good. My question is much simpler: why buy a state-owned Chinese bank when you could just as easily buy HSBC or Citigroup ?
Let's face it: if the cycle of fear and greed that rules China's initial public offerings works in their favour, BoC and CCB are not going to come cheap.
After all, BoC's international operations, which are listed in Hong Kong, trade on more than two times its book value - roughly the same as Citibank or HSBC and much more than, say, JPMorgan Chase or Royal Bank of Scotland.
Admittedly, investors seeking "growth" could be attracted by the prospect of mouthwatering rises in earnings per share as the newly-listed Chinese lenders use the new capital to increase efficiency and productivity.
But the reality is the IPO money will go to clean up balance sheets and reduce bad loans - the reason for listing in the first place - not to pump up EPS growth.bsAnd if it is EPS growth you are after, other Asian Pacific banks, such as Australia's Macquarie Bank (+40 per cent EPS this year according to UBS research) offer better prospectses
And for those who want to part-share in the miracle of a big country growing fast, lenders such as India's HDFC Bank - well established, low risk and with 25 per cent forecast earnings growth - must be a credible alternative to patched-up Chinese banks.
The truth is that international fund managers, who can invest their money across the world, do not need to come to Asia, and China of all places, to gain exposure to the financial services stocks. For all the excitement of Asia's stocks, it is difficult to see the attractions of banking sectors that are either fiercely competitive (Taiwan, Hong Kong), risky (South Korea, Indonesia), over-banked (Singapore, Malaysia) or underdeveloped (China).
Several analysts are wondering whether the merger between Japan's Mitsubishi Tokyo Financial Group and UFJ, announced yesterday, would create a behemoth capable of challenging HSBC and Citibank on the global banking arena. Perhaps I am missing something but I really cannot see how the question arises. On one hand you have two domestic banks huddling together to prevent one of them from going down and on the other you have the world's biggest, most efficient, financial services powerhouses. The combined MTFG-UFJ may end up with more assets than Citibank but it's what you do with them that matters.
亚洲银行业 不是好买卖
周五，台风即将席卷香港，暴风雨吞噬整个地区。这是个科技高度发达的城市，人们甚至可以在车中用手机打开空调。因此令人欣慰的是，居民事先都得到了高科技的准确预报，用胶带把大多数窗户都贴得密不透风。
当下一轮股市旋风席卷香港和纽约投资界时，预计同样会出现这种不足为凭的防范行动。我当然是在谈论中国两大国有银行――中国银行（Bank of China）和中国建设银行（China Construction Bank）期待已久的上市发行。
与难以预测的风暴天气不同，投资者应该能够准确地觉察到中国银行风暴的走向，其目标正是他们的腰包。
这两家信贷机构都急于在明年初上市，投资银行则策划如何说服国际基金经理和香港散户，让他们作出认购首发股这一明显不合逻辑的决定。
投资银行说，影响中国各银行资产负债的痼疾――坏账正迅速减少。昨天，中行大胆地宣称，其坏账已低于贷款总量的6%。考虑到几个月前这还是个两位数，这一变化令人瞠目。
体系和运营都在得到显著改善。一旦“战略投资者” 教给中国人怎么做，这只会变得更好。建行的战略投资者是花旗集团（Citigroup），而中行的战略投资者则由一个志愿者同盟组成。
再加上2005年初国际资本市场有望掀起新一轮“中国热”，中行和建行应该能够如愿以偿，从慷慨的股市投资者手中筹集到大约160亿美元。嗯，至少理论上如此。
当然，不要过于消极。我想，目前各种各样的暗示，选择性的信息披露，以及给投资者和媒体半生不熟的“高层简报”等，也有着积极的一面。有一点不错的是，虽然中国的金融机构在奢侈浪费和低效信贷的文化中成长，却总是很节俭，即使对待真相亦是如此。
我想省却与你进行技术上的探讨，比如坏账减少是否真实（抑或只是贷款量增加了？），账目是否值得信赖（试过2.75万个分支机构的“抽样调查”记录吗？），以及管理是否完善等。我的问题简单多了，当你可以同样轻而易举地购买汇丰（HSBC）或花旗的股票时，为何要买中国国有银行的股票？
我们应正视这一点：如果左右中国首发股的恐惧和贪婪周期对其有利，中行和建行的股价就不会便宜。
别忘了，在香港上市的中银国际的股价是其账面价值的两倍多，几乎与花旗和汇丰持平，大大高于JP摩根大通（JPMorgan Chase）或皇家苏格兰银行（Royal Bank of Scotland）等。
无可否认，随着这两家刚上市的中国信贷机构把新资本用于提高效率和生产力，其股票每股收益增长的前景令人垂涎，从而会吸引那些追求“增长”的投资者。
但现实是，首发股筹集的资金将用来改善资产负债，并减少坏账，这才是上市的首要原因，而不会将其用来提高每股收益。如果你看重的是每股收益增长，澳大利亚的麦格理银行（Macquarie Bank）等亚太区的其他银行前景更佳（根据瑞银（UBS）的研究报告，今年麦格理的每股收益增长率为40%）。
对于那些希望部分投资于高速增长的大国经济奇迹的人来说，诸如印度的HDFC银行（HDFC Bank）等声誉好、风险低，预计收益增长率高达25%，因此与拼凑起来的中国银行首发股相比，它一定可以成为可靠的替代者。
事实上，可以在全球投资的国际基金经理并不需要到亚洲、特别是中国来投资金融服务业股票。尽管亚洲股市令人兴奋，但银行业却并不吸引人，它要么竞争激烈（如台湾、香港），要么风险巨大（如韩国、印尼），要么银行过多（如新加坡、马来西亚），要么不够发达（如中国）。
几位分析师都想知道，日本三菱东京金融集团（Mitsubishi Tokyo Financial Group）和日联控股（UFJ）昨天宣布合并后，会否打造出一艘能够在全球银行业对汇丰和花旗构成挑战的巨型航母。或许有什么东西我没弄懂，但我确实无法看到问题所在。一边是两家本国银行为防止其中一家倒闭而草率结合，而另一边则是全世界最大、最高效的金融服务业巨擎。三菱东京和日联控股合并后，资产也许会超过花旗，但关键却是如何使用。
