Chinese Banks stock under pressure...for a while

CNBC 21 Dec 2010

"Chinese banks will need to raise 500 billion yuan ($73 billion) in capital next year, the country's bank regulator said. According to Li Fuan, a director at the China Banking Regulatory Commission, capital adequacy ratios have been stretched by expanded lending.
Agricultural Bank of China, which is expected to launch an initial public offering, needs to raise 100-200 billion yuan, he said at a forum.
China's banks are under pressure to bolster their capital after new loans surged to record levels in the first half of this year, and while the pace of
lending has since subsided, it is expected to remain relatively high next year."
My take:
Chinese banking stocks fell today across the board. Beside Agricultural Bank fo China, I understand that there are several other chinese banks that are looking to tap the market next year. This could pose some liquidity issue for the chinese and HK market, since such listings are expected to be quite huge in size. At the same time, banking stocks will continue to be susceptible to news of capital adequacy requirement, hence putting pressure on their price.
I personally believe the capital adequacy requirements will remain as the Chinese regulator key instrument to blunt any potential asset inflation, as the chinese central bank has limited room to raise their interest rate next year with the US and other developing countries maintaining a loose monetary policies, without having added pressure on the RMB and export.

Attached are the chart for ICBC, China bank of construction and bank of China (H-Shares). Seems like all is showing a breakdown from trendline.
Avoid short term buy on chinese banking stocks for now. Can look to short on rebound.

Nonetheless, chinese bank long term prospects remain robust.

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