Asia-Pacific income from equities “soars” as population ages

Investors have received record income from Asia Pacific companies after dividends there grew by more than twice the expected figure for dividend growth around the world.

They received the equivalent of £222.6 billion (€250.1 billion) in the 12 months to July after Asian dividend payments (excluding Japan) grew by 15.9%.

According to Janus Henderson Investors, this “soaring” rate of growth was more than twice the estimated 5.5% growth in dividends seen across the rest of the world.

Between 2009 and the end of July this year, dividends paid by companies in the Asia Pacific region (ex-Japan) have more than tripled in value and a total of £1.3 trillion has been paid to shareholders on an annual basis.

In the rest of the world, dividends doubled (103%).

By way of further comparison, UK dividends grew by 76.5%, which is “impressive for a mature economy, but behind the faster-developing regions of the world”, said Janus Henderson, which produces the Henderson Far East Income Index.

On an underlying basis (which excludes the impact of exchange rates and special dividends) dividend growth in the Asia Pacific region, excluding Japan, over the 12 months to July 31 was equivalent to 13.2% – also well ahead of the global total. Over the next 12 months on an underlying basis, Janus Henderson expects dividends in the region to rise 10.9%.

Mike Kerley, manager of Henderson Far East Income trust, said: “The Asia Pacific region is much more than just a crucible of investment and growth, enticing investors interested in making capital gains. As economies have developed, and companies have matured, it’s now a huge income-generating machine too.”

This is because Asian populations are increasingly looking to receive an income from their savings, which is resulting in a more entrenched culture of dividend paying, added Kerley.

The fastest growth has come from Taiwan and South Korea, while Taiwan, China and Hong Kong have together contributed three-fifths of the increase in the Asia Pacific dividends since 2013.

The Henderson Far East Income Index analyses dividends paid by the 500 largest firms by market capitalisation.

©2018 funds europe

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