The global dividend has become the worst since the financial crisis

LONDON (Reuters) – The coronovirus crisis will see a dividend payment slash between 17% -23% to the world’s largest firms this year or could exceed $ 400 billion, a new report showed, though areas such as Tech are Fighting the trend.

FILE PHOTO: Passengers wearing protective face after an outbreak of coronovirus disease (COVID-19) are shown on a screen displaying stock prices outside a brokerage in Tokyo, Japan, March 17, 2020. REUTER / Issei Kato

Global dividend payments fell from $ 108 billion to $ 382 billion in the second quarter of the year, calculated by fund manager Janus Henderson, which equated to a 22% year-over-year decline that was at least since 2009. The worst will happen.

Low payments were seen in all regions except North America, where Canadian payments proved to be flexible. Worldwide, 27% of firms cut their dividends, while more than half of those in the worst-affected Europe did so and two-thirds canceled them outright.

Janus Henderson said in a report published on Monday, “2020 will see the worst results for global dividends since the global financial crisis.”

“Now we expect the headline global dividend to fall 17% to the best position. The payout of $ 1.18 trillion … Our worst-case payout could fall 23% to $ 1.10 trillion.” (Graphic: Global Dividends Since 2009 – Here)

The breakdown of the various areas showed some major differences.

Banks and other financial firms have been ordered by the European Central Bank to halve the $ 45 billion cut in Europe’s Q2 dividend drop by $ 77 billion to stop paying dividends.

Mines and oil firms were badly hit by the widespread fall in commodity prices and consumer discretionary companies saw their actions also hit strongly in government lockdowns, resulting in very low payouts.

In contrast, dividends from Tech and Telecom and Healthcare firms were relatively unaffected, with dividends of up to 1.8% and 0.1%, respectively, on an underlying basis. (Graphic: Banks, retailers and media dividend slammed but take power on – here)

That great technical flexibility has also helped Microsoft (MSFT.O) And Apple (AAPL.O) Made its way into the world’s top ten dividend payers for the first time this year. That list is still topped by Nestlé (NESN.S).

“Dividend trends are reflecting society and stock market trends at this time,” said Janus Henderson’s head of global equity earnings, Ben Laughhouse.

He said, “Probably we are going to see growth from some parts of the technical sector. ‘”” There are very strong balance sheets in that area. ”

Going forward, he said, some key factors will determine how strong the dividend recovery will be.

The most obvious is the path to coronavirus, but also what American companies do later this year and whether Europe’s banks get the green light early next year to resume their payments.

“The big question for America is what will happen in the fourth quarter. If many companies make significant reductions in their dividends, the payout will be set at a lower level by the end of 2021. ”

(Graphic: The world’s largest dividend payer – here)

Reporting by Mark Jones; Editing by Daniel Wallis

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