Global dividend payouts drop in second quarter on dollar effect

Without the currency change, payouts would have increased 8.9 percent globally.

“At negative $52.2bn, the exchange rate effect this quarter was the largest in any period on HGDI record”, Henderson said.

An underlying rise of 8.6pc in continental Europe was “encouraging, and faster than we expected”, Henderson said, with bumper payments from the Danish shipping company AP Moller-Maersk and the consumer goods group Nestlé adding to the $133.7bn total. The strength of the US dollar had a significant impact again…

Payouts fell 6.7 percent to $404.9 bn from $434 bn in the previous quarter, the firm says in its latest research report.

“But dividends have been a bit better than we thought”, said Ben Lofthouse, fund manager at Henderson, who cited Europe as a major driver of Henderson’s upgraded dividend growth forecast for 2015.

The report noted that second quarter was relatively small for Australian dividends.

The world’s biggest companies rewarded shareholders with 8.9pc growth in dividends in the second quarter – but the strength of the dollar erased the benefits for many investors. The dollar has risen 6.6 per cent against a basket of currencies since the start of the year.

This increase in underlying growth, Henderson said, continues to be driven by growth in dividends from US stocks, which were up 10%, to $98.6bn, the sixth consecutive quarter of double digit growth. On an underlying growth basis, North America achieved a 9.3 per cent increase.

Accounting for around a quarter of annual global dividends, Henderson pointed out that increasing dividend payments in this sector bode well for income investors.

The report also found positive signs in Europe and Japan and confirmed that the US remained the engine of global dividend growth. “But this is less about a renewed boom to financial payouts and more about a gradual return to normality”.

“We now expect global dividends of $1.16trn this year, which is down just 1.2 per cent at a headline level”.