Domestic bank stocks showed strong performance. As of press release, Bank of China (03988) rose 4.05% to HK$3.6; Bank of Communications (03328) rose 3.53% to HK$5.58; China Merchants Bank (03968) rose 2.92% to HK$35.2; and CCB (00939) rose 2.01% to HK$5.07.
The Zhitong Finance App learned that Bank of China had strong performance. As of press release, Bank of China (03988) rose 4.05% to HK$3.6; Bank of Communications (03328) rose 3.53% to HK$5.58; China Merchants Bank (03968) rose 2.92% to HK$35.2; and CCB (00939) rose 2.01% to HK$5.07.
Ping An Securities pointed out that continued interest rate cuts and an increasingly serious “asset shortage” had a significant negative impact on bank operations. Further release of repricing pressure in the first quarter may drive industry interest spreads to narrow further, but at the stock allocation level, the continued decline in risk-free interest rates also further highlighted the value of banks' fixed income allocations based on high dividends. Looking at the whole year, the restoration of consumer spending tendencies and risk appetite is still worth looking forward to, and has become a catalyst for the sector's profit and valuation recovery.
CITIC Securities pointed out that in the first quarter of 2024, on the one hand, in a low interest rate environment, the market actively revalued dividend assets; on the other hand, the market fluctuated greatly, and the banking sector's overall stock price performance significantly outperformed the market. Under the strong performance of the sector, the share of bank stocks in active fund heavy holdings picked up compared to the end of the previous quarter. Furthermore, the share ownership ratio of capital from the north and south in the banking sector has increased, which also reflects the market's preference for dividend strategies. Looking ahead, based on the pace of economic recovery and macrofinancial performance, we expect that the short-term market style will still favor dividend strategies, and banking sector holdings are expected to continue to recover.