Bank of America Predicts Stock Drop on Yield Jump: China Credit

China’s borrowing costs are climbing at the fastest pace since late 2010 and Bank of America Corp. says that’s making stocks vulnerable, just as it did back then.

The benchmark 10-year yield jumped 37 basis points this quarter and 48 basis points in the three months through September, the biggest increases since a 57 basis point gain in the final three months of 2010, a ChinaBond gauge shows. The Shanghai Composite Index slid 22 percent in 2011, after touching a nine-month high in November 2010, and shares are near the most expensive level relative to corporate bonds since February, according to data compiled by Bloomberg.