According to the firm, dividends are expected to grow by 5% over the course of the year, down from the 9.3% level seen across the prior four years.
However, it is worth noting that much of this drop at a headline level is the result of the significant slump in commodities prices that has seen some of the world’s most generous dividend payers halt payments.
“In the most severe cases, such as Australia and the UK, this trend is actually set to see the aggregate dividends paid across these markets come in less than last previous year’s total. Australian basic resourced companies are set to cut their aggregate dividends by 45% in the coming 12 months which will contribute to the country’s 2.2% fall in aggregate dividends,” Markit said.
In the UK, Markit added, basic materials firms are expected to cut payments by as much as 56%, which would mean a 1% fall in aggregate ordinary dividends in 2016.
It is not all doom and gloom, however. In the US, the 500 largest US companies by market cap are expected to grow their ordinary dividend payments by 6.9% year on year, hitting $425bn, Markit said.
In Europe and Asia there are also a few bright spots, with a few countries in each region that are expected to boost payments significantly.
South Korea is expected to be the top dividend payer in Asia, Markit says, while New Zealand, the Philippines and India should all see growth in excess of 10%.
While, in Europe, the same can be said of Italy, the Netherlands, France and Poland, while Denmark takes the lead with a 21% expected increase in aggregate payments.
