Sharp fall in Chinese bank shares by Sandra Stoklaskova

On Monday a news report said that Bank of China might write down the U.S. mortgage securities and some others increased reserves for possible losses. After this, Chinese bank shares fell sharply. This report was the first signal to Chinese creditor, the same which has already avoided losses from the U.S. credit crisis, that in short time they might face serious problems because of their holdings of subprime securities. The spokesman of Bank of China, Wang Jianping, said, that they will inform about the details of their assets at the end of March, when the bank will announce their annual earnings, too. The shares of Bank of China sank by 4.1 percent in Shanghai and by 6.4 percent in Hong-Kong market. This fall helped to the overall decline in these cities. Wang Junqing, an analyst at Guosen Securities in Shanghai said: "The subprime woes in the U.S. have raised concerns at home about risks in the domestic mortgage market and prompted selling in banking and real estate companies," Two other main creditors, Industrial & Commercial Bank of China and China Construction Bank, are rising their reserves, due to eventual write downs on subprime mortgage holding. In the last years, Chinese bank's profits and revenues rocketed, thanks to growing economy and increasing real estate prices. On the other hand, the specialists say that there is a danger of problems from fluctuating real estate prices and financial conditions.

related story: http://www.youtube.com/watch?v=3eUbxJAud5w

by Sandra Stoklaskova for PocketNews (http://pocketnews.tv)

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