Merrill Lynch bullish on investment banking fees in China

Recent report paints rosy picture, but could be a case of wishful thinking.

A snortingly bullish report from investment bank and brokerage Merrill Lynch suggests that China's stock markets, dwarfed by the country's banking sector and foreign stock markets, could be a major component of global investment banking profits in the next five to ten years. Given the dismal performance of China's A-shares, Yuan-denominated and traded only on the mainland recently touching six-year lows, the report is sure to raise some eyebrows.

Chinese stocks listed outside China, at Rmb 2200 billion, have almost twice the market cap of those tradable shares listed within China Rmb 1200 billion, while the corporate debt market in China is tiny and rigidly controlled. Only around one third...

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