UBS Group released a report stating that the MSCI Chinese bank index fell by 4.6% in the past month, underperforming the MSCI Chinese index (which fell by 2.6%). Among the H-share stocks covered by the bank, Minsheng Bank performed the best (falling by 0.7%), while CM Bank performed the worst (falling by 10.5%). The northbound investment through the Stock Connect program accounted for 28.2% of the free float market value of Chinese mainland banking H-shares, increasing by 48 basis points monthly, with Agricultural Bank of China experiencing the largest increase in holding value (up by 7.2%) and Bank of Communications experiencing the largest decline (down by 4.4%).

Looking at the positive side, the dividend yield of large-cap Chinese mainland banking H-shares reached 8%, which is relatively attractive. However, potential downward adjustments in mortgage rates pose a downside risk to the dividend per share of China mainland banking stocks. The bank believes that China Construction Bank Corporation, Bank of China, Agricultural Bank of China, and Bank of Communications have defensive characteristics.