Global dividends hit record in 1Q

20th May, 2019 10:26:15 printer

LONDON: Companies around the world paid out a record amount of dividends in the first quarter, data showed on Monday, as they shrugged off worries about slowing economic and earnings growth.

Global dividends rose 7.8 per cent in the first quarter to US$263.3 billion, matching last year's growth and pushing the Janus Henderson global dividend index to an all-time high, according to a report by the asset manager on Monday, report agencies.

The data shows the growing optimism of companies and helps explain equities' continued appeal in the face of global trade tensions and worries about a global economic slowdown.

The escalating trade dispute between the US and China has sent chills through global markets over the past few weeks, sending investors to safe-haven assets like government bonds.

"The growth rate is slightly higher than we're expecting for the year as a whole," said Ben Lofthouse, head of global equity income at the asset manager.

"Given the volatility at the end of last year and all the concerns multiplying around the world with Brexit and the trade war, that's pretty positive."

Janus Henderson expects a record US$1.43 trillion in payments this year, up 4.2 per cent in headline terms, the report said.

That's substantially lower from the 9.4 per cent rise seen in 2018 and would be the slowest growth since 2016.

Still, that's significantly higher than government bond yields. US 10-year Treasury bond yields were around 2.4 per cent, while Germany's Bund yields headed back towards 2-1/2 year lows on Friday.

World stocks markets have moved in step with higher dividend payouts over the past decade or so, Citi's global strategy team said in a recent note.

The bank said global stocks rose 7 per cent per year since 2010, the same pace as global dividend growth.