Emerging market dividend payments in Q3 have crashed almost 15% or $29.4 billion ($17.5 billion) year-on-year as a series of developing market currencies repriced downward versus the dollar.
The fall means that for overseas investors the emerging market universe has provided no dividend growth since 2011, when developing currencies were rising sharply versus G10.
In dollar terms, globally dividends rose 11.7% over 12 months to a record $426 billion, with the seasonal bump from Europe’s Q2 peak period for payments dominating the total as local payouts rose 18.2% to $153 billion, the strongest period of income growth in the last five years.
The emerging market total was affected by a series of reliable-yielders dropping out of the defined investment universe of the 1,200 largest companies said Henderson, which compiled the data.
Of the total, $3 billion was also due to Ecopetrol of Columbia’s decision to pay its entire 2014 dividend in one go. Currency fluctuations accounted for 6.8% of the change while index adjustments accounted for 9%, according to the Henderson Global Dividend Index report.
‘Colombia (by dint of Ecopetrol), Chile and the Philippines are the only countries to have delivered growth year on year (though index changes penalise many of them), with growth in Chile broadly based and the Philippine Telephone company boosting the total from that country,’ said the report.
‘The three of them together made up one quarter of emerging market pay-outs in the period.’
Elsewhere Japan more than kept pace with European dividend growth, up 18.5% over the year to $25.2 billion, the largest quarterly payment since the index was launched in 2009.