Xi’s Backing Turns State Firms Into China’s Hottest Stock Trade

A nascent rally in China’s major state-owned companies 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 largest government-backed stocks has gained 7% so far in 2023, outperforming the benchmark CSI 300 Index by nearly 5 percentage points and staying resilient amid a global banking rout. State firms accounted for half of the top 10 best-performing stocks on the Hang Seng China Enterprises Index, with eye-popping gains including China Satellite Communications Co.’s 118% surge and China Mobile Ltd.’s 49% jump.