Thoughts on stocks and sectors

For this analysis, I will be looking at only the top 5 listed banks in each country.    China The total assets of the Chinese banking industry are ~ USD 49 tn and system wide non-performing loans (NPLs) are at ~1.8%. Classication of NPLs is done using the Expected Credit Loss (ECL) model in IFRS accounting. Loan loss allowance is stipulated at 150% of NPLs.  There are 23 banks greater than USD 10 bn market cap. For analysis, I will only be looking at the top 5 banks by market cap, which are Industrial and Commercial Bank of China (ICBC), China Merchants Bank (CMB), China Construction Bank (CCB), Agricultural Bank of China (ABC), and Bank of China (BOC). All but CMB are government owned. They constitute ~38% of total banking assets and ~ 54% of total banking profits. I have summarised the key financial and business metric in the table below (figures in USD bn except avg employee salary that is in USD).  India The total assets of the Indian banking industry are ~ USD 2.7 tn and system wi

To get an overview of the market of listed companies in India, China and Hong Kong (referred to as China hereafter), South Korea, and Taiwan. For this comparison I have taken only companies above USD 1 bn in market capitalisation. Though China for obvious reasons has the most listed companies above USD 1 bn , there seem to be fewer <USD 2.5 bn companies in India than in the other countries.    The profitability of Indian companies looks lower than companies in China, Korea and Taiwan compared to the market capitalisation. This would be due to higher valuation multiples for Indian companies.    To understand the reasons for the higher valuation, I looked at 3 things, which will still not explain everything but gives a good idea.  1. I pulled out the RoE of the companies and Indian companies fare much better than the others, which would explain the higher valuation to some extent. This also needs to be looked in the context of risk free rate, which is the highest in India at 6%, China