C Construction Bank +5,08%

939 CCB 8.69 +0.42 +5.08 3,751,989 433,922

CCB  hovers in and out of the 50-day moving average where it is now at $7.53. The share price consolidates above the $7.00 level recently. However, Stochastic Oscillator has just unveiled a buying signal and RSI-14 recoups the 50-mark level. Both technical indicators suggest the share price to head north in the short-term. By technical analysis, the counter sets to test the resistance at $8.00 again.

This share will ride on an upward trend heading towards $8.00 level whenever it confirms a breakout from the critical point.

BROKER CALL-China Construction Bank started 'buy', target 9.5 hkd


Capital Group said it it began coverage of China Construction Bank with a ""buy"" and a target price of 9.5 hkd due to strong performance by the lender and affordable valuations.

""The asset quality of CCB continued to see improvement. The impaired loan ratio fell to 2.83 pct and provision coverage ratio rose to 97 pct, respectively, due to the robust growth of the mainland economy. The valuation looks inexpensive,"" Capital said in the note to investors.

The company's shares closed in Hong Kong today down 0.19 hkd, or 2.5 pct, at 7.51 hkd.  

Like ICBC (1398.HK), CCB (0939.HK) relatively outperforms, down 1.3% at HK$5.96 vs HSI down 2.7%, supported by bank tipping FY07 net profit likely to rise 48% on-year, which already includes provision for welfare expenses at CNY9 billion.

ICEA says both banks succeed to accelerate growth from 1H, "reflecting their resilience to tightened operating conditions.

" Valuations become attractive after recent selloff, with ICBC trading at 14.1X FY08 PER, 2.78X PBR, CCB at 14.8X, 2.88X. "Together with their proven track records, they become our top picks for bottom fishing." CCB fourth most heavily traded with HK$917 million.