China dividend payouts fall

Added 18th November 2015

China’s dividends for the full year are on course to fall for the first time on record, according to a report from Henderson Global Investors.

China dividend payouts fall

On a headline basis, Chinese dividend payouts declined 2.1% year-on-year. Underlying growth, which strips out exchange rate movements, was -0.1% underlying. 

China Construction Bank, the mainland's largest global payer in the third quarter, made its smallest increase in years and China Citic Bank cancelled its distribution altogether.

"As a whole, the pressure on Chinese dividends may continue for a little while longer," said Sat Duhra, manager of the Henderson Horizon Asian Dividend Income Fund.

"Offsetting this is regulatory change in South Korea, which encourages higher dividend pay-outs. Overall, we expect dividend growth to return on trend as currencies settle following the ‘normalisation’ of US monetary policy.”

Hong Kong took its cue from China, though it slightly outperformed its larger neighbour. Headline dividends rose 2.8%, held back by a cut from China Mobile.

"As a whole, the pressure on Chinese dividends may continue a while longer."

In Japan, underlying dividend growth was 22.5% in the quarter, which was in line with first half dividend growth.

"Japanese companies are currently growing dividends at one of the fastest paces in the developed world," the report said. 

Globally, the firm expects dividends of $1.15trn in 2015, down 2% annualy in headline growth. Underlying growth is expected to be 9.5%.

In 2016, it issued a preliminary forecast for dividends to grow 2.4% (headline) to $1.18trn, an underlying increase of 4.1%.

Japan and are North America still set to be the fastest growing regions, while emerging markets lag behind, Henderson said. 

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