The ASX 200 is trading more than 1% lower this afternoon, putting it on track to finish the week down almost 2%.
The local market decline comes as commodities prices sink, and follows a slump on Wall Street on the back of strong economic data that raises the possibility of interest rates remaining higher for longer.
There’s now just over a month to go until the end of the financial year and, to date, it’s been a solid financial year for investors. The ASX 200 is up 9% so far and when considering dividends, that growth is closer to 13% despite challenges around high interest rates and inflation.
Global dividends lift in Q1
Global dividends climbed to a first-quarter record of US$339.2 billion, according to the latest Global Dividend Index from Janus Henderson.
Q1 is seasonally quiet in many parts of the world, but first-quarter records were broken in Sweden and Canada, while US payouts reached an all-time high. Two very large companies, Meta and Alibaba, paid their first ever dividends, boosting the global Q1 total by 1.2 percentage points.
Australia continued its dominance of Asia Pacific dividend payments, making up three quarters of total payments. Although the region lagged, rising by just 2% for the first quarter on an underlying basis, influenced heavily by BHP which reduced its dividends by a fifth. Excluding BHP, the region would have seen double-digit growth.
In a rising interest rate world, banks were among the biggest dividend payers, accounting for a quarter of global growth in Q124, up 12%. The improving bank dividend payments saw Commonwealth Bank of Australia (ASX:CBA) rise to ninth in the world for global dividend payments over the last quarter. None of Australia’s other big four banks made the top 20 global dividend payers.
More broadly, most sectors booked solid single-digit underlying increases.
Head of Australia at Janus Henderson Investors Matt Gaden said: “The resilience of the Australian share market was evident over the quarter as it recorded healthy dividend growth despite the pressures on commodity prices and the mining sector.
“The big four banks remain dividend darlings, showcasing the important role that they play for Australian investors.
“Overall, global economies continue to face inflationary headwinds and the cost of capital is tipped to stay higher for longer. But with a wave of government money coming into renewable energies and new opportunities are unlocked by AI technology, dividend investors are urged to remain aware of how these forces will impact global dividends over the medium to long term.”
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