Despite an expensive valuation, Far East Horizon's offering attracts strong demand and bankers hope the deal will mark a turning point for Hong Kong’s quiet IPO market.
However, China will have to stomach higher structural inflation in the next few years as the nation gets wealthier and wages increase at a double-digit rate, the brokerage firm argues.
China’s banking sector will have a higher non-performing loan ratio in coming years, but good profitability, strong liquidity and adequate capitalisation will enable the major lenders to absorb unexpected credit losses.
Charlene Chu, Beijing-based senior director for financial institutions at Fitch Ratings, talks to FinanceAsia about the risks presented when loans are repackaged into wealth management products.