The Great Bank Hype; The global market view of China's big lenders has changed rapidly, from troubled mess to surefire bet. Too rapidly, many would argue.(Industry overview)

Byline: George Wehrfritz

It was a fair bet that China Citic Bank Corp. would sizzle when its shares debuted on Friday. But few experts anticipated that China's latest bank to go public would see its stock price double in Shanghai within hours, even as it rose a modest, albeit respectable, 14 percent in Hong Kong. By day's end, according to Bloomberg data, Citic Bank's market capitalization had hit $49.2 billion, some 100 times what it earned last year, a premium unheard of anywhere but in China these days. "This shows that foreign investors [in Hong Kong] are more rational in valuing this bank," said Dominic Chan, a bank and insurance-sector analyst for CLSA in Hong Kong, adding that the huge run-up in Shanghai "just doesn't make any sense."

Citic's bifurcated debut adds to mounting worries about China's high-flying equities. Just a few years ago, troubled banks were seen as one of the big sinkholes that could bring down the China miracle--but ...