China bank results, Japan trade data on tap

HONG KONG (MarketWatch) � Corporate results from several major Chinese companies and economic data from China and Japan should keep investors occupied this coming week in Asia.

Three of China�s five largest banks and the country�s biggest insurer will be reporting their 2011 results this week. Among lenders, Agricultural Bank of China Ltd. ACGBF �HK:1288 �is expected to impress with annual net profit growth of 43%, according to estimates compiled by FactSet Research.

Profits should rise about 31% at China Construction Bank Corp. CICHY HK:939 and 21% at Bank of China Ltd. BACHY HK:3988 , FactSet estimates show.

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�In general, we expect the banks to top consensus earnings expectations with the average bank we cover reporting earnings that are 2% higher than forecasts,� Bernstein Research analysts led by Mike Werner wrote in a report.

The results should demonstrate that non-performing assets, especially on loans made to local governments and to property developers, aren�t hurting Chinese banks� profits yet.

What investors will be watching for is the level of capital at the end of 2011. The focus will be on whether any of them are required to sell new shares to shore up their capital position, so that they can maintain their pace of lending.

�Overall, we expect [fourth quarter of 2011] earnings could disappoint relative to [the third quarter] due to rising non-performing loans and back-loaded expenses that are going to erode banks� earnings. Offsetting this is the continued expansion of net interest margins and fee income growth,� the Bernstein Research analysts added.

Some bad news may also be coming from China Life Insurance Co.LFC �HK:2628 ,�one of the world�s largest insurers by market value. The company had recently warned that its 2011 profit could drop by 40% to 50% from 2010 levels. A profit decline in that range won�t surprise markets, but investors may be looking forward to the company�s forecast for the current year, and how the company plans to improve its operating performance. Read more about China Life�s profit warning.

/quotes/zigman/4868099/sampled USDJPY 78.3250, +0.0917, +0.1172%

China economic data due

Investors will get a first glimpse of this month�s manufacturing conditions in China on Thursday, when HSBC will announce its flash Purchasing Managers� Index for March. The HSBC survey showed that manufacturing activity in China contracted in both January and February, although there was an improvement last month.

A reading below 50 indicates a contraction and one above 50 shows an expansion. While it shouldn�t be a surprise if the initial number for March comes in just around 50, a bigger contraction could hurt investor sentiment.

Also on Thursday, Japan will release its preliminary trade balance for February. After reporting its first trade deficit in 30 years in 2011 � as it imported more fossil fuels to run its power plants and make up for the loss of nuclear power, Japan also reported a trade deficit in January.

With the yen now on a downward trend, the country may have spent more on its imports in February and could be looking at another deficit. What will also be interesting to watch is how the country�s exports fared during the month, especially to China.

The dollar USDJPY �has risen about 8.5% against the yen so far this year, including a 2.7% appreciation thus far in March.