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By Stefano Rebaudo
MILAN, Aug 23 (Reuters) - Global dividends are forecast to
rise to $1.39 trillion this year, up slightly from a previous
estimate to reflect a stronger than expected recovery in the
company payouts, Janus Henderson said in a report published on
Monday.
Its latest estimate, up 2.2 percentage points from an
earlier one, is just 3% below the pre-pandemic peak.
Dividends, a company payout to shareholders, slumped last
year against the backdrop of the COVID-crisis as regulatory
constraints and government pressures to restrict payments
weighed.
But a strong recovery is currently under way, with headline
growth at 26.3% in the second quarter, data from the investment
manager's Global Dividend Index showed.
Underlying growth - adjusted for special dividends, changes
in currency, timing effects, and index changes – was 11.2%.
On a year-on-year basis, 2021 growth is expected at 10.7%,
equivalent to an underlying rebound of 8.5%.
Dividends from companies restarting payments totalled $33.3
billion and accounted for three-quarters of the underlying
growth in the second quarter, the report said.
"Global dividends in aggregate will likely regain their
pre-pandemic levels within the next 12 months," Jane Shoemake,
client portfolio manager on the global equity income team at
Janus Henderson, said in a statement.
The current "recovery will not be hampered by a weak banking
system as it was after the global financial crisis a decade
ago," as policymakers continue to provide fiscal and monetary
support to the economy, she added.
Limits on bank dividends had a significant impact in 2020 as
lenders accounted for half of the fall in global payouts, but
constraints have since been lifting.
In early August, European banks announced billions of euros
in payments to shareholders. These included ING Groep NV
and Intesa Sanpaolo, whose interim dividend
will be subject to discussions with regulators.
European Union banks meanwhile have benefited from a strong
performance in stress tests by the region's banking watchdog.
Among U.K. banks, HSBC reinstated dividend payments
flagging higher payouts in the future, after the Bank of England
scrapped its remaining pandemic curbs in mid-July.
Europe is staging a solid rebound after a wave of
cancellations and suspensions last year.
At the same time, companies continued their payouts during
the first year of the pandemic in the United Sates and in
Canada, the Janus Henderson report said.
Booming commodity prices boosted payouts by mining
companies, with industrials and consumer discretionary coming
back strongly, the report also showed.
Defensive sectors, like telecoms, food, food retail,
household products, tobacco and pharmaceuticals, registered
characteristic low single-digit growth rates.
(Reporting by Stefano Rebaudo
Editing by Mark Heinrich)
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