① What impact will the early arrival of the dividend season in Hong Kong stocks have on the market? ② Why has short-term capital continued to flow into the H shares of "China Agricultural Construction Transportation" which have hit a historical high?
On May 14, Financial Associated Press (Editor: Feng Yi) reported that the banking sector in the Hong Kong stock market saw a collective rise again today.
As of the time of writing, $BANK OF CHINA (03988.HK)$ 、$ABC (01288.HK)$、 $CCB (00939.HK)$、$BANKCOMM (03328.HK)$All reached historical highs during the trading session.$BQD (03866.HK)$Other city commercial banks also refreshed their yearly highs.
On the news front, the People's Bank of China previously announced that it would lower the reserve requirement ratio for Financial Institutions by 0.5 percentage points starting from May 15, 2025.
However, from a short-term perspective, the continued strength of bank stocks may be more related to the market's shift back to high-yield dividend assets.
On one hand, mainland enterprises listed in Hong Kong are about to welcome this year's dividend season earlier than before. Unlike previous years which concentrated dividends in the third quarter, this year's payouts in the first half of the year have significantly increased. Data shows that as of April 30, the total amount of dividends planned by mainland Chinese stocks in Hong Kong for the second quarter this year is expected to reach $36.1 billion, the highest for the same period on record.
In this context, recent inflows of funds into high-yield dividend sectors have started. Data shows that as of May 13, $Hang Seng SCHK High Dividend Low Volatility Index (800769.HK)$has a dividend yield as high as 8.4%, reaching a historical high of 92%, with symbol assets $China Merchants Hang Seng SCHK High Dividend Low Volatility ETF (520550.SH)$has recorded six consecutive increases, just a 1.2% rise away from its historical peak.
Huachuang Securities pointed out that from the perspective of dividends, all A-share listed banks are expected to distribute dividends in 2024, and the dividend payout ratio is generally maintained or increased. The average dividend payout ratio increased by 0.8 percentage points to 26.1% compared to 2023. Assuming that the dividend payout ratio in 2025 remains the same as in 2024, 13 listed banks are expected to have a dividend yield exceeding 5% in 2025.
On the other hand, the proactive layout of institutional investors such as insurance funds is expected to drive a herd effect in bank stock investments.
According to information from the China Insurance Industry Association, as of May 9, insurance funds have conducted 13 stake increases this year, with 6 of them being in bank stocks. The symbol for increase includes $ABC (01288.HK)$ 、$PSBC (01658.HK)$、 $CM BANK (03968.HK)$ 、 $CITIC BANK (00998.HK)$ Mainly large Banks.
Wind data also shows that as of the end of the first quarter of 2025, insurance funds appeared in the top ten circulating shareholders list of 735 individual stocks, with a total shareholding Market Cap of 580.883 billion yuan. Among them, the shareholding in bank stocks is 27.821 billion shares, with a Market Cap of 265.78 billion yuan, accounting for nearly half.
On$PING AN (02318.HK)$At the 2024 annual Shareholders' meeting,$Ping An Insurance (601318.SH)$Co-CEO Guo Xiaotao also responded to the frequent Shareholding and stake announcements in bank stocks in recent years.
Guo Xiaotao stated, "During the interest rate decline cycle, we began asset allocation and layout several years in advance. The investment returns from high-dividend, state-owned large bank stocks are very good, and currently our investment return rate is leading."
Huachuang Securities previously analyzed that market style factors, coupled with tariff disturbances, have generally caused fluctuations in dividend-related assets. However, we believe that under low interest rate environments, the stability of bank profits and dividends remains prominent, and the logic of medium to long term capital entering the market has not changed. Banks with high dividend yields and high asset quality still have absolute returns, and it is recommended to pay attention to their cost-effectiveness in allocation.
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Editor/Rocky
