Faced with the complex international situation and many uncertain factors, the A-share market once experienced irrational adjustment. At this time, “confidence is more precious than gold” has become a true portrayal of the current capital market.
On March 16, the financial stability and Development Commission of the State Council held a special meeting and proposed to “maintain the stable operation of the capital market”; Since then, the CSRC has stated for two consecutive days that it will “spare no effort to maintain the smooth operation of the market”. Investors’ confidence was boosted, and the A-share market was also greeted with a “rising voice”.
While releasing the signal of maintaining stability at the policy level, listed companies have also launched large-scale dividend plans to enhance the confidence of investors with “real gold and silver”.
According to the data, only on March 18 and March 19, there were as many as 69 listed companies that disclosed the profit distribution plan in the 2021 annual report. Among them, the cash dividend of Ping An Insurance (Group) Company Of China Ltd(601318) 2021 reached 43.174 billion yuan, which has been increased for ten consecutive years, which was recognized by the majority of investors, and the share price rose by 5.34% on March 18. Further statistics show that as of the deadline of March 20, 332 companies in the A-share market disclosed their annual report results, of which 244 companies announced dividend plans, accounting for more than 70%.
In fact, in recent years, with the active encouragement and guidance of policies, the cash dividend mechanism in the A-share market has been gradually improved, and the number and scale of cash dividends of listed companies have increased year by year, significantly improving the sense of gain of investors, attracting long-term funds into the market and promoting the steady development of the stock market. According to the statistical data of the CSRC, the cash dividend of A-share listed companies has increased steadily in recent years, with a dividend rate of more than 30% and an average dividend rate of more than 2%. According to the statistics of the implementation date, from 2018 to 2021, the cash dividends of listed companies have exceeded trillion yuan for four consecutive years.
The author believes that cash dividends can convey confidence and vitality to investors and the A-share market, increase the driving force of sustainable investment, and promote the stable and mature development of the capital market.
As we all know, investors are the foundation of the development of the capital market, and the benefits of dividends to investors are obvious.
Capital gains and dividend income are the two major sources of income for stock investors. Cash dividend is a deterministic income and an important source of investment income Guotai Junan Securities Co.Ltd(601211) securities has made it clear that the core pricing element of A-Shares in the future is dividends.
When it comes to dividends, investors are most concerned about the dividend yield. At present, the dividend yield of many excellent listed companies in China exceeds 3%, and more companies reach more than 5%. At present, the interest rate of ten-year Treasury bonds, known as the wind vane of risk-free yield, is 2.8% in China and 2.156% in the United States, which undoubtedly shows that China’s stock market has a sufficient margin of safety and is very attractive to capital. At the same time, it also highlights the long-term investment value of the A-share market.
Listed companies are the cornerstone of the capital market. For a long time, while growing and developing, gradually creating conditions to give shareholders a reasonable return on investment is not only an important embodiment of listed companies’ performance of shareholders’ fiduciary responsibility, but also an internal requirement for the stable and healthy development of the capital market.
Continuous and stable cash dividends are inseparable from the “hard” operating performance. In recent years, the overall financial and operating conditions of listed companies are good, and the quality is continuously improved. Continuous dividends also create a good atmosphere for the high-quality development of the capital market.
Therefore, well-known foreign institutions such as Goldman Sachs, UBS Securities and JPMorgan Chase recently sang more A-Shares and proposed to over allocate A-Shares and Hong Kong shares. They believed that the valuation was lower than the historical average and the performance and growth signals were clear. It is believed that China’s GDP growth target of about 5.5% this year shows its determination to stabilize growth. At the same time, at the critical moment, policy support will become the key to stabilize confidence and growth.
It can be seen that the special meeting of the Finance Committee of the State Council recently made it clear that long-term institutional investors are welcome to increase their shareholding ratio. Maintain the long-term trend of China’s healthy economic development and jointly maintain the stable development of the capital market. This is undoubtedly of great significance to stabilize the A-share market.
Confidence is hope. China’s capital market has achieved the goal of “growing up” in more than 30 years. It is believed that under the guidance of the steady growth policy, it will support and shape a number of high-quality and influential groups of listed companies, so as to gradually achieve the goal of “growing up”, highlight the long-term investment value and continuously attract foreign investors. At the same time, China’s capital market will also make progress while maintaining stability and boost the further development of China’s economy.
