- Global dividends rose 5.0% on an underlying basis to a record US$1.66 trillion in 2023; headline growth was 5.6% for the year
- Asia Pacific ex Japan is the weakest region, where most developed markets, with the exception of Singapore, experienced lower payouts year-on-year
- Japan’s payout broke the record in Japanese yen terms, up US$7.6 billion (JPY1 trillion) year-on-year
- China’s dividend growth reached a record high of US$52.3 billion, with two thirds of companies cutting dividends, surpassing other major markets
- Total dividends for 2024 are forecasted to mirror the 5.0% underlying growth of 2023, owing to the anticipated decline in special dividends to pre-pandemic levels.
HONG KONG/SINGAPORE, March 13, 2024 – Global dividends rose to a record US$1.66 trillion in 2023, up by 5.0% on an underlying basis, according to the latest Janus Henderson Global Dividend Index. The year ended on a particularly positive note, with Q4 dividends rising 7.2% on an underlying basis, thanks to strength in Europe, the UK and Japan.
Asia-Pacific ex Japan saw lower payouts year-on-year
Asia-Pacific was the weakest region in 2023, with payouts falling to US$172.3bn, down 6.0% on an underlying basis. The fourth quarter saw the pace of decline in the region slow to -0.5% (underlying), with only Hong Kong showing lower dividends year-on-year in Q4. Apart from Singapore, most developed markets in Asia-Pacific saw lower payouts year-on-year, excluding Japan.
Hong Kong payouts dip amid property woes and CNOOC
Payouts in Hong Kong were US$55.5 billion, representing headline growth of 1.0% but 1.2% lower in 2023 on an underlying basis. Troubles in the property sector deducted almost 2.5 percentage points from the growth rate, while oil producer CNOOC made the biggest single negative contribution, cutting its regular dividend and not repeating its large 2022 special. CNOOC made a particularly large negative impact in the fourth quarter.
Meanwhile, banks, as in many other parts of the world, made the most important positive contribution and there were also notably higher payouts from consumer-facing companies such as beverage company Nongfu Spring and Anta Sports which are seeing higher profits. Despite the decline in overall payouts, seven in ten of Hong Kong’s companies increased payouts or held them steady.
Singapore led dividend growth
In 2023, Singapore emerged as the only market in the region to register dividend growth, with a record payout of US$11.9 billion, representing an underlying growth of 26.8%. This was largely attributed to the banking sector, which benefited from a combination of post-pandemic normalisation and profit growth driven by the higher interest-rate environment. Additionally, there were also no dividend cuts among Singapore’s companies in our index.
Australia’s mining sector dividend cuts impact payout
Relatively large cuts in the dominant mining sector during 2023 wiped out one fifth of Australia’s dividends and meant that collectively Australian payouts fell 10.7% on an underlying basis to US$60.8 billion. Three quarters of companies grew their dividends or held them steady but their increases were too small to offset the big cuts from mining groups. Double-digit growth from the banks and a one quarter increase from Woodside Energy made the most positive contributions during the year. With no mining companies represented in the fourth quarter, underlying growth of 6.9% was driven by the banks whose margins are expanding along with their peers around the world.
Taiwanese and Korean companies cut dividends due to sluggish demand
In 2023, Taiwan’s dividend was recorded as US$29.8 billion. The 13.0% underlying decline in dividends largely reflects the impact of sluggish demand from China. Nan Ya Plastics, China Steel and Cathay Financial were among several Taiwanese companies to sharply reduce their payouts year-on-year as their profits came under pressure. More than half the Taiwanese companies in our index cut dividends year-on-year.
South Korean dividends were US$14.4 billion which is 0.9% lower on an underlying basis in 2023. Growth from vehicle manufacturers was not enough to offset cuts from Posco, the mining group, as well as Samsung and LG whose profits have fallen on the back of higher costs and a slump in post-pandemic demand. The majority of South Korean companies cut dividends in 2023.
Chinese dividends reached new record
As one of the emerging markets in our index, China’s dividends rose just 4.2% in 2023 on an underlying basis, reaching a new record of US$52.3 billion. This is primarily due to Petrochina, which made the biggest positive contribution to growth across all emerging markets, raising its distribution by more than a third. Notably, just two companies, China Construction Bank and Petrochina, accounted for half of the total Chinese dividends in our index.
However, the dividend growth was held back by reduced banking payouts which made up half of China’s total dividends. Two thirds of Chinese companies cut dividends, far more than in any other major country. This reflected both the country’s economic challenges, dividend policies tied to profits and the heavy weighting of banks in the Chinese stock market.
Japan saw record breaking dividends
2023 was a very good year for dividends in Japan. Payouts rose to US$78.9 billion, 10.5% growth on underlying basis and broke the record in Japanese yen terms, up US$7.6 billion (JPY1 trillion) year-on-year. The weakness of the exchange rate against the US dollar meant the dollar value did not match previous highs, however. Growth was very broadly based; 91% of Japanese companies raised payouts or held them steady, ahead of the global average, delivering median dividend growth of 11% across the 83 companies in our index. Japan’s largest payer, Toyota Motor, made the biggest single contribution to growth, increasing its payout by 23%, well ahead of the average, reflecting strong profitability.
2024 Forecast
Janus Henderson expects 2024 to show similar underlying growth to 2023, even if a likely fall in one-off special dividends reduces the headline growth rate. Janus Henderson forecasts dividends of $1.72 trillion for 2024, up 3.9% on a headline basis, equivalent to underlying growth of 5.0%.
Sat Duhra, Co-Portfolio Manager for Asian Dividend Income at Janus Henderson, said: “The weakness in Asia in 2023 was greatly impacted by the economic weakness in China and the direct impact on its trading partners. However the commitment to dividends and underlying cash flow generation remains strong with recent expectations of corporate reform in Korea continuing to support the longer term growth story. With the expected rebound in earnings growth in Asia, some signs of stabilisation in China and Central Banks in the region looking to cut rates as their next move as inflation has been much less pronounced in the region, there are reasons to be optimistic. We expect the longer term growth trend of dividends will continue though the performance of individual markets and sectors are likely to remain mixed.”
ENDS
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Notes to editors
Our headline growth rate describes the change in the total dollar amount paid by companies compared to the corresponding quarter each year. Our underlying figure adjusts for the distortion that can be caused by one-off special dividends, changing exchange rates, the effect of companies entering and leaving the global top 1,200 that comprise our index and the impact of changes in payment dates. The latter two tend to be negligible over the course of a whole year at the global level, though they can have a greater impact in any one quarter, geography or sector.
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