Abstract: Explain the reasons of buying HK stock China Merchants Bank and share my views.
What I want to share with you today is the transaction I made on September 17. The details are as follows:
- China Merchants Bank (HK stock code: 3968)
- Quantity: 500 shares
- Bought price: HK$57.35
- Commission fee: HK$60.71
Reasons to buy 3968
Today, China Merchants Bank experienced a rare intraday drop of more than 10%, which is believed to be due to fear that mainland banks will be affected by Evergrande’s huge debts. However, China Merchants Bank had the biggest drop among so many H-share Chinese banks, falling by 9.38% throughout the day. Industrial and Commercial Bank of China (HK stock code: 1398), China Construction Bank (HK stock code: 939), Agricultural Bank of China (HK stock code: 1288) and Bank of China (HK stock code: 3988) only fell by 3%, 4.07%, 4.09% and 2.53% respectively. Even the Minsheng Bank (HK stock code: 1988), which is known to lend the most money to Evergrande, fell only 5.94%. What caused China Merchants Bank to fall so sharply? Today, I have not seen any particular bad news about China Merchants Bank. Of course, there may be some bad news that has not yet surfaced, but it may simply be because CMB has the highest valuation among the H-share Chinese banks and it is also one of the most invested mainland banks, so if foreign investors want to withdraw, CMB will be definitely most affected. However, it is also possible that funds are taking advantage of the mainland Mid-Autumn Festival holiday to push down the stock price. Without the purchase of southbound funds, foreign capital can easily control it. If this is the case, it will certainly get better when the mainland market reopens on Wednesday.
But in any case, there may be many possibilities behind it, and it is difficult for ordinary people to see clearly. I personally continue to believe that China Merchants Bank is one of the best mainland banks, and even the best, so I don’t think we as investors have to think too much. Simply put, if you are able to increase your position in the good companies, it will bring you high returns in the long run. In fact, the share price of China Merchants Bank has risen much more than that of other mainland banks in the past year, so it is quite normal that it will get more corrections this time.
Comments and sharing
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