Beyond the booming new consumption and pharmaceuticals, there has been a quietly rising trend in the market recently — "high-yield stocks."
As of June 9, the Hong Kong stock "high-yield stock concept" Index has fully recovered its losses since Trump's release, reaching a historical high. Looking back, in the 18 months since the beginning of 2024, the high-yield stock concept index has only declined for 4 months, providing investors with a good holding experience.
The background of high-dividend stocks reaching new highs.
Behind the continuous new highs of "high-yield stocks" is the consistent inflow of institutional funds.
The current tariff policy increases global economic uncertainty, and high-yield stocks are mostly utility-type, cash flow stable companies. In an environment filled with macro uncertainties, high dividend assets are significantly attractive.
On the other hand, the U.S. is still in a rate-cutting cycle, with traders pricing in 1 to 2 rate cuts this year, while many banks in China have broken below "1" in one-year deposit interest rates – in this low-interest-rate environment, there is a demand for institutions to allocate high-dividend stocks to replace the gradually disappearing high-yield bonds.
Since the beginning of the year, mainland insurance funds have been aggressively increasing their shareholdings including$PSBC (01658.HK)$、 $CM BANK (03968.HK)$ 、$ABC (01288.HK)$、$China CITIC Bank Corporation (601998.SH)$、$BEIJING ENT (00392.HK)$、$CHINA RUYI (00136.HK)$、 $CHINA WATER (00855.HK)$ 、$DATANG RENEW (01798.HK)$And$CHINA SHENHUA (01088.HK)$There are 9 Hong Kong stocks in total.
Among them, there are 5 bank stocks and 3 utility stocks. $PSBC (01658.HK)$In the past year, the dividend yield has been over 11.5%. $CHINA SHENHUA (01088.HK)$ 、 $CITIC BANK (00998.HK)$ In the past year, the dividend yield has also been over 7.5%.
Amid continuous inflow of institutional funds, most "high-yield stocks" have performed remarkably this year: $CHOW TAI FOOK (01929.HK)$ up over 77% this year, $NCI (01336.HK)$ up over 50%, $CQRC BANK (03618.HK)$ 、 $PICC GROUP (01339.HK)$ Increased by more than 40.86%.
Seven high-yield stocks have been significantly bought by northbound funds, exceeding 10 billion.
Morgan Asset Management points out that in the current market environment, maintaining a "barbell" allocation framework may be a good choice: one hand allocates "Technology growth" assets, and the other hand allocates "high dividend" assets, which can find a balance between offense and defense, thereby enhancing the holding experience and the probability of investment success.
Since the beginning of this year, the so-called 'smart money' from the North has been continuously flowing into high-interest stocks, with a net purchase amount exceeding 10 billion for 13 Hong Kong stocks, in order:$BABA-W (09988.HK)$、$TENCENT (00700.HK)$、$CHINA MOBILE (00941.HK)$、$MEITUAN-W (03690.HK)$、 $CCB (00939.HK)$ 、 $BANK OF CHINA (03988.HK)$ 、 $CM BANK (03968.HK)$ 、 $ICBC (01398.HK)$ 、$SMIC (00981.HK)$、$China Shenhua Energy (601088.SH)$、$LI AUTO-W (02015.HK)$、$POP MART (09992.HK)$、$Agricultural Bank Of China (601288.SH)$, among which 7 are high-yield Bank stocks.
Institutional views
On June 5, BOCOM INTL released a Research Report indicating that the supporting factors for the high dividend strategy of Chinese financial stocks have further strengthened, suggesting to seize the high dividend theme. The institution believes that the core factors supporting the high dividend strategy are still valid, and the tariff policies of the Trump administration, along with their high uncertainty, have exacerbated economic and Capital Markets volatility, making high dividend Assets even more attractive.
Soochow's research reports suggest that relative valuation remains low, with a high payout ratio, which is expected to become a driving force for the next upward trend, accumulating energy for a comprehensive market rally.
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Edited/joryn
