news

한어Русский языкEnglishFrançaisIndonesianSanskrit日本語DeutschPortuguêsΕλληνικάespañolItalianoSuomalainenLatina

In the past two years, stocks with high dividends and high distribution have been highly sought after, and the CSI Dividend Index has significantly outperformed the CSI 300 Index.

The reason is that against the backdrop of economic downturn, falling interest rates and scarce growth, individuals, enterprises and financial institutions are experiencing a comprehensive asset shortage.

It is better to buy high dividend stocks than to deposit money in the bank

More and more people are finding that, in the context of falling interest rates, it is better to buy bank stocks directly than to deposit money in banks. Take ICBC as an example, the three-year fixed deposit rate of ICBC is 2.35%, but the current dividend rate of ICBC is 5.61%.

As we all know, ICBC will not explode. Its dividend strategy actually outperformed the three-year time deposit, and those who bought in first can also enjoy the benefits of rising stock prices. As a result, the share price of ICBC, the most "ordinary" stock in the capital market, has shown a very stable trend in the past two years.

Financial institutions need to increase their profits through the stock market on the liability side

Some people say that stocks are too risky to buy and they only dare to buy financial products. But guess what the underlying assets of the financial products you buy are? In the past, they might be non-standard assets such as interest-bearing bonds, municipal investment bonds or real estate financing. However, as bond interest rates gradually decline, the yield on 10-year government bonds has reached 2.3%, and the bond yield can no longer cover the income from financial products.

At this time, whether it is bank financial management or insurance annuity, they can only buy high-dividend stocks to cover the liability costs of more than 3%. These are all long-term institutional funds.

In April, the State Council issued a new set of nine rules for the capital market, one of which is to restrict companies that have not paid dividends for many years and encourage listed companies to pay dividends. Soon after, the Shanghai and Shenzhen Stock Exchanges also issued relevant measures to directly delist companies that fail to meet the dividend standards.

This is a strong medicine. Why does the country introduce this policy at this point in time?

Let's first review the past 20 years, when real estate was on the rise and the economy was developing rapidly, interest rates were high, and the stock market was really unattractive in the face of the 10% interest rate. Therefore, except for a sharp fluctuation every few years, the A-share market has been around 3,000 points all year round.

The fate of bonds is completely different. As we have experienced the process of interest rates going from high to low, under this background, bonds have experienced a decade of bull market, and the trend of the CSI Treasury Bond Index is picturesque:

Source: Wind

Now, bond interest rates have reached a low level, but M2 has exceeded the 300 trillion mark. The whole society is looking for new high-yield assets to carry these funds.

The country hopes that the stock market can also experience a bull market like bonds, so that many problems can be solved.

How to do it? The answer is to turn stocks into bonds. If a stock can pay dividends continuously and stably, wouldn't it become an asset similar to bonds? As long as it does not delist, it is a perpetual bond.

So, for companies that can't tell a convincing high-growth story, what you have to do isProven ability to consistently provide a higher dividend yield than the 10-year Treasury bondFor these companies, continued low and declining interest rates could support share prices in the same bull market that bonds enjoyed in the past.

This is the underlying logic of this round of bull market in dividend assets, which comes from the downward pressure of interest rates, the guidance of national policies, and the gradual awakening of fixed-income funds. These have jointly changed the aesthetics of funds in the entire market. I didn't expect that we could achieve value investment for all in this way.

Drawing on the experience of Japan and the United States, a long-term bull market in the stock market requires two conditions: first, interest rates continue to decline; second, listed companies can actually give back to shareholders in the form of dividends or repurchases, which is the investment capital market we have been talking about recently.

Our market is evolving in this direction. There is still a lot of room for China's long-term interest rates to fall. With the mandatory policy level and the positive incentives of the capital market, listed companies have enough reasons to face capital expenditures and scale expansion with a more prudent attitude and increase the dividend ratio to shareholders.

The current situation is likely just the beginning of a long-term trend. The best strategy is still "If you can't beat it, join it, and the sooner you join, the better!

Warm reminder: The above content is for reference only and does not constitute investment advice. The market is risky and investment should be cautious.

"Private Equity Club" is jointly launched by NetEase Finance and Zemujia.