(Bloomberg) -- A rally in Chinese bonds is raising the appeal of the country’s battered bluechip stocks, thanks to the latter’s higher dividend payouts in an environment of declining interest rates.
The estimated dividend yield on the benchmark CSI 300 Index over the next 12 months now commands a 0.8-percentage-point premium over the yield on the nation’s 10-year sovereign notes, the widest since 2006 when Bloomberg started compiling relevant data.
The bluechip stocks reinforced their dividend advantage after the country’s 10-year government bond yield fell to a record low of 2.17%, following the central bank’s recent decisions to cut two key interest rates. In contrast, Chinese companies are increasingly bumping up their dividend payouts, amid a regulatory push to boost returns in a sagging equities market.
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