The total dividend payout amount by firms in the CSI 300, which tracks the largest stocks in Shenzhen and Shanghai, is expected to be over RMB 1 trillion ($157.2 billion) for 2021 for the first time, increasing from RMB 395.1 billion in 2021, according to an S&P Global Market Intelligence study, reports the South China Morning Post.
Dividend payments by domestic Chinese firms have increased by more than 150% over the past 10 years, as investors value steady returns amid market volatility while firms use it to counter drop in share prices.
“During equity market downturn conditions, the high dividend yield basket proved to be a defensive cushion against share price drops,” said S&P Market Intelligence analysts led by Ruiying Zhao. Investors also value consistent dividends to counter market volatility. Mainland firms listed across all Chinese bourses paid a record RMB 1.67 trillion in dividends to shareholders in 2021, 17% higher than 2020, according to separate data from the China Securities Regulatory Commission.