In today’s intricate and ever-evolving financial landscape, the differentiation in market structures and investment expectations is increasingly pronounced, resembling a battleground devoid of gunfire where various sectors and asset types portray distinctly divergent trajectories. Amid this whirlwind of volatility, dividend assets, known for their innate stability, have emerged as a resplendent gem, drawing significant attention from market participants.

This morning, the A-share market exhibited a captivating scene, with the stock prices of the four major state-owned banks soaring to new historical highs. The Industrial and Commercial Bank of China, China Construction Bank, Agricultural Bank of China, and Bank of China all advanced by over 1%, and their steadily rising stock price graphs appeared as a monumental testament to their rock-solid strength. Behind such remarkable performance lie numerous deeper factors that are intricately intertwined.

Everbright Securities conducted a thorough analysis, highlighting that the banking sector has recently basked in the affectionate embrace of favorable policies, akin to timely rain showering down. Take, for instance, the Loan Market Quote Rate (LPR), which has remained stable. While seemingly trivial, this stability plays a crucial role in supporting the banks' net interest margins. As one of the key indicators of a bank's profitability, a steady LPR implies that banks can sustain considerable profit margins in their deposit and lending operations, thereby solidifying their performance growth base. Concurrently, the State Council and the State-owned Assets Supervision and Administration Commission (SASAC) have been proactive, vigorously promoting central enterprises to enhance their market value management, particularly focusing on publicly listed companies that have long been scrambling due to low valuations. This initiative holds immense significance for banking stocks, especially those lagging in the mud of low valuations, which have undeniably welcomed the dawn of optimism, greatly enhancing market confidence and steadily pushing their stock prices upward.

Reports indicate that since the advent of a comprehensive macroeconomic stimulus package at the end of September, global financial market investment dynamics have stealthily shifted. Overseas actively managed funds have swiftly recalibrated their portfolios, akin to vigilant hunters on the prowl for new opportunities within the vast Chinese market. Recently, asset management giants such as Morgan Asset Management, Fidelity, and Prudential, which hold trillions in assets globally, have decisively moved to significantly increase their stakes in Chinese banking stocks. They have precisely identified the massive investment opportunities borne from the powerful impetus of stimulus policies driving a rebound in the Chinese economy.

Among these, China Merchants Bank has attracted notable attention, becoming a coveted target for numerous funds. Morgan Asset Management increased its holdings in China Merchants Bank by an astonishing 222.7% through its JPM China A (acc) USD fund, a clear indication of their optimistic outlook on the bank’s future growth prospects. Similarly, Fidelity’s series of emerging market opportunities fund embraced the bank with even more fervor, marking an increase of 1333.7%. In addition to China Merchants Bank shining brightly, other banks such as China Construction Bank and Ningbo Bank have also seen their stocks bolstered, creating a constellation of stellar banking stocks shining in the financial night sky.

Jochen Breuer, a fund manager at Fidelity International, deeply articulated that historically, dividend strategies have served as a robust umbrella, offering reliable downside protection during turbulent market periods, effectively cushioning against downturn impacts. More enticingly, in the long term, they can yield impressively attractive total returns. Looking at the past two decades of global markets, it’s remarkable that around 40% of cumulative returns have surprisingly stemmed from dividends reinvested. This data encapsulates immense investment wisdom, suggesting that investors should concentrate their efforts on high-quality companies capable of continuously enhancing their dividends. These firms are like bedrock in the market, exhibiting solid profitability while generously rewarding shareholders. Moreover, investors are encouraged to meticulously manage risks through a stringent valuation framework, ensuring a stable progression along their investment journey. Specifically, dividend stocks in non-U.S. markets possess notable investment value due to unique geographical advantages and sector characteristics, warranting significant exploration by investors.

Currently, banking stocks are leading the charge, heralding a powerful resurgence for dividend assets in the market. Everbright Securities has astutely observed that market investment sentiment is showing a clear trend of weakening. Once the shining stars leading the charge, technology stocks now find themselves doused with cold water from the market, experiencing significant corrections as their stock price trajectories resemble roller coasters. Against this market backdrop, the inherent stability of dividend assets becomes even more pronounced. They stand as a tranquil harbor, providing investors a safe haven amidst the turbulent storms of the market.

Xing Xing, the director of the research institute at Boxin Securities, delves into a profound interpretation of the steadily rising trajectory of banking stocks, suggesting that they could serve as a driving engine, propelling the entire undervalued dividend sector forward. Liu Chong, chief strategy researcher at Shenzhen Android Investment Co., shares a similar perspective, mentioning that dividend stocks resemble a robustly sailing giant vessel, navigating steadily over long distances and acting as an essential stabilizer for the market. In times of market fragmentation or when investors find themselves lost in search of primary investment themes, they will increasingly focus on the quality of their investment targets. After all, in a choppy market, only those assets with solid foundations and high quality can provide investors with sufficient security. Dividend assets, particularly during the earnings report season, will display companies' profitability and dividend-paying capacity comprehensively before investors, making their investment value even more conspicuous. Coupled with the dynamic fluctuations in the current interest rate environment, whether interest rates rise or fall further highlights the risk resistance and earnings stability of dividend assets, enticing those seeking certainty in returns to flock to these assets.