Sharon Fay, the Head of Equities at Alliance Bernstein says the Chinese market is cheap at the moment and she's particularly interested in their Banks

Sharon Fay, the Head of Equities at Alliance Bernstein says the Chinese market is cheap at the moment and she's particularly interested in their Banks. It tends to be a good entry point when everyone hates something but even then we are treading carefully because they have a lot of policy issues to navigate. One of the favourable aspects that China has is the government's large reserves give them the ability to stabilise the financial system. They have the capital to avoid a major melt-down and they have a closed banking system so other global banks will not feel the impact of bad loans in China. The question is how [authorities] would intervene [if the banks ran into credit problems] and whether they would first extract a penalty from equity and bondholders before the government steps in. Alliance Bernstein are overweight Europe and underweight US, Emerging Markets and Australia. (VIEW LINK)


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