SINGAPORE - Deceleration in the world economy is beginning to take its toll on dividend payouts around the world, according to the latest Janus Henderson Global Dividend Index.
In Singapore, US$3.8 billion (S$5.3 billion) of dividends were paid out in the second quarter of 2019, US$500 million or 11.6 per cent lower than the US$4.3 billion a year ago.
While this represented an 11.6 per cent drop, the island nation's underlying dividend growth - which adjusts for special dividends, change in currency, timing effects and index changes - saw an increase of 17.7 per cent. The biggest contributing factor to dividend drop in Singapore was the factoring in of special dividends.
Total dividends paid globally for the quarter was US$513.8 billion, 1.1 per cent higher versus US$508.1 billion a year ago, despite growth being held back by the greenback's strength.
While this was a new record, it was also the slowest rate of increase for more than two years. Janus Henderson said this was in line with its forecast, which had already factored in a slower growth rate this year.
Globally, underlying dividend growth was 4.6 per cent, which was only slightly below the long-run average.
Second quarter figures were in line with Janus Henderson's expectations, hence the asset manager made no change in its 2019 forecast of US$1.43 trillion in dividends, equivalent to 4.2 per cent growth on a headline basis, and 5.5 per cent in underlying terms.
Asia-Pacific excluding Japan lagged slightly behind the rest of the world, with the region's US$43.2 billion distributed being 2.2 per cent higher on an underlying basis.
For seasonal reasons, Hong Kong dominated Q2, said the asset manager, adding that underlying growth was 2.5 per cent and that a quarter of Hong Kong companies in the index, including China Mobile, cut their dividends. "This is a larger proportion than in all the other large markets, reflecting a slowing Chinese economy," said Janus Henderson. Headline figures showed Hong Kong's dividend payout dropping by US$1 billion from US$19 billion to US$18 billion.
Japan on the other hand, registered the best performance among the developed regions by paying out US$39.6 billion, 10.3 per cent higher than US$35.9 billion for the year ago period.
Indonesia was a notable performer in South-east Asia, paying out US$5.5 billion for Q2, 10 per cent higher versus US$5 billion a year ago.
Janus Henderson is a London-headquartered asset manager that invests in global equity markets, and has US$359.8 billion in assets under management.
The Janus Henderson Global Dividend Index (JHGDI) is a long-term study into global dividend trends which measures the progress global firms are making in paying their investors an income on their capital, using 2009 as a base year - index value 100.
It takes into account the world's largest 1,200 companies by market capitalisation. These companies represent 90 per cent of global dividends paid. The next 1,800 companies represent 10 per cent, making their effects on the results negligible.