ICBC the biggest bank

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Yesterday, ICBC, Industrial and Commerce Bank of China (6001398.SS), went up 0.57 (just one cent shy of 10%), and closed at 6.37 Yuan. With that price, ICBC exceeded Citibank and became the world largest bank (market cap wise), and closes in Microsoft in terms of market cap (bloomberg).

I remember last time ICBC closed in Citibank was 3 or 4 months ago, but this time it has more sustance (I mean fundamental, or earnings). Chinese banks, along with real estate developers, are on the fire lately and people attribute that to:

1) The rise of the Yuan.

2) The continuing growth of domestic economy, along with rising CPI (inflation) and rising property value. The actual bank interest rate is negative if you consider the inflation (4%).

But we should not over look the intrinsic value of the properties and distribution channels of ICBC. Unlike Citibank, which has limited presence in the US and China, ICBC has more than 16,000 locations all over China.

As a distant relative (who does not know sophiscated financial theory) put it: buying ICBC stocks will be much better than deposit money in ICBC, in long term.

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