Sovereign Wealth Fund Institute

In the aggregate, Chinese bank stocks have fallen ever since Moody’s Investors Services released information that Chinese banks might have higher than expected exposure to local government debt.  There is tremendous concern that Chinese lenders will be incapable to absorb losses on defaults; however, a Chinese government plan to clean up the problem could alleviate the situation.  [Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view site content.]

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Shares of China Construction Bank Corporation rose as much as 7.4% Thursday on reports China’s US$ 200 billion sovereign-wealth fund may scoop up part of Bank of America Corp.’s (BAC) stake in the Chinese lender.

China Construction Bank was up 3.2% at HK$4.90 at the midday break on Hong Kong’s stock market, having risen as high as HK$5.10 in the morning session. The benchmark Hang Seng Index was up 0.8% at 16,967.

read more: Wall Street Journal