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DBS noted that China new loans in February amounted to RMB1.02 trillion, much higher than consensus of RMB750 billion. During the period, the growth momentum was the mid and long-term enterprise loans. It was believed the loans were driven by the "One Belt One Road" development.

DBS quoted from the governor of People's Bank of China(PBOC) Zhou Xiaochuan that PBOC may remove the deposit-rate cap in 2015. In fact, PBOC has ordered some small and medium-sized banks to lower interest rates. DBS believed the required reserve ratio cut can relax the liquidity and prepare for liberalization of interest rate.

DBS expected there is a revaluation potential and a growth on book value for Chinese banks. CM BANK (03968.HK)  +0.700 (+3.986%)    Short selling $70.19M; Ratio 6.491%   and CCB (00939.HK)  +0.050 (+0.796%)    Short selling $94.74M; Ratio 6.103%   will be DBS's top picks.

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