Global dividends to partially recover COVID losses, predicts IHS Markit
15 January 2021 UK
Image: Gajus/adobe.stock.com
Total dividend payouts are expected to increase by 6.5 per cent, from $1.67 trillion in 2020 to $1.78 trillion this year, according to IHS Markit.
Total dividend payouts fell by more than $113 billion as the COVID-19 pandemic caused unprecedented volatility last year.
While not expected to surpass 2019 levels, dividends in the Eurozone and the UK are expected to increase 22 per cent and 30 per cent, respectively, on strength of recovery in insurer and bank dividends, says IHS Markit.
Meanwhile, dividends in the US are expected to fall 0.7 per cent this year on declines in the banking and oil and gas sectors.
In Asia Pacific (APAC), the increase of dividend growth is expected to continue increasing which is currently being driven by Asia Pacific, emerging markets and wider availability of the COVID-19 vaccine, IHS Markit says.
Amira Abdulkadir, head of US dividend forecasting at IHS Markit, says: “With the uncertainties of the Brexit deal and US elections behind us, and the availability of the vaccine expected to reduce uncertainty, we expect more companies to resume payments or grow dividends in 2021.”
The banking sector is expected to regain its ranking as top dividend payer with global sector dividends expected to grow by 10.9 per cent to $214.2 billion in 2021 after 2020 saw significant cuts and payment suspensions.
Banking sector growth will be driven by the projected 80 per cent dividend growth in Europe, the Middle East and Africa, as well as a more modest 5 percent growth in APAC.
However, IHS Markit expects a slight drop in banking sector payouts in the Americas.
The report also reveals that distributions from emerging markets are predicted to increase by 6 per cent, with China the top contributor.
Total dividend payouts fell by more than $113 billion as the COVID-19 pandemic caused unprecedented volatility last year.
While not expected to surpass 2019 levels, dividends in the Eurozone and the UK are expected to increase 22 per cent and 30 per cent, respectively, on strength of recovery in insurer and bank dividends, says IHS Markit.
Meanwhile, dividends in the US are expected to fall 0.7 per cent this year on declines in the banking and oil and gas sectors.
In Asia Pacific (APAC), the increase of dividend growth is expected to continue increasing which is currently being driven by Asia Pacific, emerging markets and wider availability of the COVID-19 vaccine, IHS Markit says.
Amira Abdulkadir, head of US dividend forecasting at IHS Markit, says: “With the uncertainties of the Brexit deal and US elections behind us, and the availability of the vaccine expected to reduce uncertainty, we expect more companies to resume payments or grow dividends in 2021.”
The banking sector is expected to regain its ranking as top dividend payer with global sector dividends expected to grow by 10.9 per cent to $214.2 billion in 2021 after 2020 saw significant cuts and payment suspensions.
Banking sector growth will be driven by the projected 80 per cent dividend growth in Europe, the Middle East and Africa, as well as a more modest 5 percent growth in APAC.
However, IHS Markit expects a slight drop in banking sector payouts in the Americas.
The report also reveals that distributions from emerging markets are predicted to increase by 6 per cent, with China the top contributor.
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