This Bank, The World’s Largest By Assets, Is A Favorite Amongst Emerging Market Stocks 3

Industrial & Commercial Bank of China

Industrial & Commercial Bank of China (IDCBY) stands at number 8 in our list of the most popular stocks that emerging market funds (EEM) (VWO) are invested in. The company was among the top 10 holdings of 4 out of 10 funds  that were part of our analysis. These are:

Among institutional investors, these are the funds that are invested into the IDCBY ADR currently:

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$8.7 billion deal to lead to a catch-22 situation

Beijing-based Industrial and Commercial Bank of China Limited is a Chinese multinational banking company, and the largest bank in the world by total assets and one of the largest by market capitalization. The bank ranks among the top 10 most valuable brands according to the latest version of Brand Finance Global 500.

Trading under the ADR ticker IDCBY on the NYSE’s OTC Market, the company has the market capitalization of about $211.5 billion.

A businessinsider report indicates that a subsidiary of the bank “has recently reached deals with seven Chinese state-owned enterprises to convert about 60 billion yuan (about $8.7 billion) of unpaid loans into equity shares.” With this, China faces a Catch-22 situation. “The propping up of unprofitable state-owned enterprises is a catch-22. If China lets the companies fail, the Communist Party risks its legitimacy and could set off unrest. But not letting the companies fail means continuing to shuffle debt around until the banking system can no longer handle it.”

Analyst recommendations: BUY

The stock currently has 80% BUY recommendations from analysts, against 20% HOLD recommendations. The stock is currently trading at $12.24.



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