China stocks: Xi’s backing makes state-owned companies hottest trade

A nascent rally in China’s big state-owned enterprises may have legs, amid hopes that more official support to revive the sector and plans for higher dividends will help extend the momentum of the country’s hottest stock trade this year.

A gauge of the biggest state-backed stocks is up 7% so far in 2023, outperforming the benchmark CSI 300 index by nearly 5 percentage points and remaining resilient amid a global bankruptcy rout. State-owned companies accounted for half of the 10 best-performing stocks on the Hang Seng China Enterprises Index, with standouts including China Satellite Communications Co.’s 118% rise and China Mobile Ltd.’s 49% jump.

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