With the banking sectors in two of the four BRIC markets — Brazil and China, facing short and long-term systemic challenges, Indian lenders have held up better than their counterparts, only to falter in the last few weeks.
While China’s banking sector is often considered both megalithic and monopolistic, there are actually over 4,000 small lenders operating in the giants’ shadows. U.S. traders can even get direct exposure to a few.
Today’s news that Singapore is liquidating $2.5 billion in Chinese bank stock should not alarm traders wary of the sector’s health. If anything, by global standards, these banks are among the most solid in the world — if, of course, you believe the official numbers.
Traders convinced that China’s banking system is on the edge of collapse can use ETFs to put their money where their mouth is – but the argument that these stocks are poised for disaster has gotten harder to make.