Zheng Quan Shi Bao Wang·2025-09-19 05:37Core Viewpoint - The recent decline in the banking sector, particularly the Industrial and Commercial Bank of China (ICBC), has significant implications, as it has broken the "bull-bear dividing line" for the first time in a year, indicating a potential shift in market sentiment [1][2]. Banking Sector Performance - Since July 11, the banking sector has experienced a continuous decline, with the sector index down over 14% as of the latest data, while other indices like the STAR 50 and CSI 300 have seen substantial gains [3]. - The dividend index has also dropped over 7% since its peak in July, breaking both the half-year and annual lines, indicating a bearish trend [3]. Market Sentiment and Economic Indicators - Analysts suggest that the rebound in key indicators such as M1 growth is leading to a shift in market risk appetite, with funds previously allocated to government bonds and dividend assets potentially moving elsewhere [4]. - The anticipated U.S. interest rate cuts and domestic "anti-involution" policies are contributing to rising inflation expectations, which negatively impact government bonds and dividend assets [4]. Investment Considerations - Despite the bearish trend, there is a divergence within the banking sector, with state-owned banks benefiting from stable high dividend yields and a slowing net interest margin contraction, while regional banks face pressure from consumer loan subsidy policies [5]. - The overall banking sector is attracting investment due to high dividend yields, with state-owned banks showing improved liability management, although asset yield pressures remain [5]. - Long-term investment in dividend assets may still be viable, especially with yields above 4%, while the banking sector could see improved asset quality if the economy performs well [5].