The A-share market is hit by a cold wave, with high-dividend sectors becoming a safe haven. Utility and banking stocks generally rose across the board.

On March 24, the A-share market opened higher and continued to fluctuate, with the market hesitating and lacking a clear direction. With the annual report disclosure period approaching, sectors characterized by high dividends such as utilities and banks became the focus of market attention.

On the trading front, the power sector led the utilities, with Diesen Co., Ltd. (300335.SZ), JinKai New Energy (600821.SH), Huayin Power (600744.SH), Ningbo Energy (600982.SH), Hunan Development (000722.SZ), Tuori New Energy (002218.SZ), and China Huadian Liaoning Energy (600396.SH), among others, hitting the daily limit.

The banking sector saw a broad rise, with all individual stocks turning positive, with Qingdao Bank (002948.SZ), Ping An Bank (000001.SZ), and CITIC Bank (601998.SH) among those with the highest gains.

According to Wind data, as of the time of this report on March 23, nearly 200 listed companies in A-shares had disclosed their cash dividend plans for 2025. Based on the latest closing prices, 41 companies had a dividend yield of over 2%, with the highest exceeding 5%.

From the latest financial data released for February, social financing increased year-on-year, with M1 growth rebounding by 1 percentage point to 0.1%, and the M2-M1 spread narrowing to 3.1%. Both short-term and medium-to-long-term corporate loans showed marginal improvement, providing sufficient fundamental support for the banking sector. Looking ahead to 2026, the banking industry is expected to combine high dividend defensive attributes with growth potential from improving fundamentals—stabilized interest margins, alleviating asset quality pressures, and a recovery in non-interest income business, highlighting the sector’s allocation value under threefold driving forces.

Nomura Orient International Securities’ latest report indicates that after the liquidity shock dissipates, it may be considered to gradually build medium-to-long-term opportunities on dips. The intensity of clashes between Israel and the U.S. and Iran has exceeded last June’s levels since March this year, and the sustainability and impact of this on the global economy remain highly uncertain. Considering that military actions by the U.S. and Israel are still ongoing, it cannot be ruled out that overseas risk aversion could evolve into panic due to further military conflicts, disrupting the Chinese market. Against the backdrop of increased volatility, due to expectations of domestic PPI recovery, switching between stock and bond asset allocations may not provide sufficient defensive protection, so investors are advised to seek defensive dividend styles within stock assets.

CICC’s research report points out that the current moment may represent a relatively low point for the A-share mid-term, with deep adjustments providing good opportunities for allocation. Although there is still some uncertainty in short-term trends, after the adjustments, the risks in the A-share market have been further released, and we believe valuations are at a relatively reasonable level. As of March 23, the dividend yield for the CSI 300 Index was 2.7%, maintaining an advantage in stock-bond cost-effectiveness. In terms of allocation, focus on several main lines: 1) Growth sectors benefiting from the implementation of AI technology, such as optical communication and storage; renewables-related batteries and energy storage. 2) Cyclical resource stocks: consider the position in the capacity cycle and focus on sub-sectors where supply-demand patterns support price increases and performance certainty, such as power grids and chemicals. 3) High dividends may still show stage-specific and structural performance this year, focusing on matching with cash flow.