Chinese investors have been taking shelter in high dividend stocks to ride out the market’s worst start to a year in more than two decades.
The CSI Dividend Index of the 100 companies on the Shanghai and Shenzhen exchanges that have a good track record of dividend payouts has risen 2.1 per cent in 2024. In contrast, the benchmark CSI 300 Index has fallen 4 per cent, marking its most muted start to a year since 2003. The dividend gauge closed last year with a gain of 0.9 per cent, trouncing the CSI 300 with its 11 per cent loss.
Chasing dividend-rich shares is seen as a conservative strategy that gains traction during weak market sentiment, as these stocks typically deliver low earnings growth rates. The strategy’s popularity among investors currently underscores the fragility of Chinese stocks, which have extended declines after an unprecedented third consecutive annual loss in 2023, as concerns about the property market and…
