(Bloomberg) — Chinese shares with high dividend yields continued to gain popularity among investors as a lackluster economic outlook provided little impetus to shift to growth stocks just yet.
An index of Shanghai-traded equities with a record of high dividend payouts rallied as much as 2.4% on Monday, pushing its ratio against the ChiNext Index — tracking growth stocks — to the highest since 2019. Banking and energy shares led the gains, with Industrial and Commercial Bank of China Ltd. touching its highest level in four years, while China Shenhua Energy Co. reached a 2008 peak.
Investor sentiment has been hammered by more signs that an economic recovery is faltering, with factory activity contracting for a second-straight month in June. Worries about China’s growth outlook lingered even after a private gauge of factory activity rose to a three-year high as indications remained that manufacturer confidence is sagging.
–With assistance from Mengchen Lu.
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