Companies in China paid $28.4bn in dividends in 2016, a 13.4% decline over the year before, a second consecutive year of diminishing payouts, according to the Henderson Global Dividend Index report.
In underlying terms, after removing the effect of special dividends and exchange rate movements, the decline was 18.7%.
The report said a big factor was Petrochina’s 75% dividend cut as a result of low oil prices. In addition, approximately half of Chinese companies reduced their dividends in 2016 as their profits declined.
Likewise, in Australia dividends declined. Australian companies paid $41.8bn in dividends in 2016, a drop of 10% compared to 2015 and the lowest amount since 2010, the report said.
The decline is due to lower profits in the mining sector as well as big dividend cuts by Woolworths and Woodside Petroleum.
Growth elsewhere
Japanese dividends, a total of $65.1bn in 2016, were up 24.4% in US dollar terms, mostly thanks to the exchange rate movement.
On the underlying basis, which puts the results in local currency, the amount actually shrank by 0.2%, which the report attributes to the strong yen’s impact on company profits. Toyota Motor, the country’s largest dividend payer, saw the payouts decline by 7% in yen terms.
Hong Kong companies paid $39.9bn in dividends, a 15.9% increase over the prior year. The increase is attributable mostly to special dividends paid by, among others, by Cheung Kong Infrastructure and MTR. After correcting for the special dividends, the underlying growth amounts to 2.7%.
As a region, Asia-Pacific ex-Japan saw dividends grow by 4.8% compared to the year before, with companies paying $115.5bn in dividends during the year. In underlying terms, the region’s dividend growth amounted to 0.7%.
Record dividend payouts
Korean and Taiwanese companies paid out record dividends in 2016. Korea Electric Power quintupled its annual payout, accounting for most of the growth in the country’s total.
Taiwan Semiconductor Manufacturing Company and Formosa Petrochemical both shared their improved profits with investors, boosting the total of Taiwanese.
Most Indian companies increased their dividend payouts in 2016, contributing to 10.8% growth in underlying terms, among the best growth in the world, according to the report. Coal India, the country’s largest payer, boosted its dividend by 20%. However, a newly-introduced dividend tax may impact this trend going forward.
Total dividend payouts in Singapore remained flat.
Tech and healthcare
The global amount of dividends paid in 2016 was $1.154tr, up 0.1% from the prior year (0.6% in underlying terms).
Of this total, North America accounts for roughly 38%.
Globally, utilities as well as technology and healthcare companies increased their dividends the most, while energy and mining industries, notably in emerging markets, led the decline.
Royal Dutch Shell is the world’s most generous dividend payer, while in Asia, the distinction goes to China Construction Bank.
Global dividends are expected to grow by 3.2% in underlying terms in 2017, thanks to promised greater spending and tax cuts in the US, as well as higher prices of oil and other commodities. Further rise in US dollar, however, could result in a much lower growth of the headline number.
The report analysed dividends of the world’s largest 1,200 companies by market capitalisation, which account for 90% of global dividends paid.
Henderson Global Dividend Index by Region
