Singapore stock dividends estimated to fall 2.8% to $19.87b in 2019: report

The drop is due to the absence of one-off special dividends paid by DBS and Keppel Corporation.

Singapore’s stock dividends are expected to pay $19.87b in total dividends for 2019 which is a -2.8% YoY decrease, according to a report by IHS Markit.

The fall was attributed to the absence of a one-off special dividends announced by DBS Group Holdings (DBS) and Keppel Corporation which amount to $90m and $1.38b, respectively.

“The big three banks in Singapore continue to be the largest dividend contributor and are projected to pay $7.13b in 2019,” IHS Markit said in its report. “Whilst total dividends from this sector are set to fall in 2019 owing to the absence of the one-off specials paid by DBS earlier this year, fundamentals remain robust and consensus earnings estimates reflect an upbeat look for the banks.”

Also read: 97% of Singapore firms paid dividends in 2017

The report also noted how DBS played down concerns relating to the impact of the trade war whilst United Overseas Bank (UOB) and Oversea-Chinese Banking Corporation (OCBC) are still expecting housing loan growth for the year to be around mid-single digit.

Meanwhile, Singaporean banks are also expanding beyond Singapore to capture growth opportunities around the region, IHS Markit noted. Coupled with strong capitalisation and expectations of a widening net interest margin over the short term, the firm said it expects the positive outlook to translate to higher dividends going forward.

“For the coming year, we are expecting the real estate sector which is the second largest dividend contributor and retail sector to pay higher dividends for the third consecutive year,” IHS Markit highlighted. “Collectively, property developers and real estate investment trusts are seto to pay $3.28b in dividends.”

The retail sector on the other hand which is represented by the newly added constituent Dairy Farm International and Jardine Cycle & Carriage are projected to pay $396.9m and $496.2m, respectively.

Japan, China, Hong Kong, Australia and Taiwan remain as the top five dividend players in the region, with double-digit growth rates expected from China and Hong Kong accounting for 80% of the projected growth within the region.

“APAC dividends have enjoyed positive growth in recent years and we expect the momentum to continue in 2019,” the firm said in its report. “Whilst trade uncertainties cloud sentiments and could hamper growth, we are expecting dividends to be resilient and grow modestly 2.3% to $759.73b (US$552.69b).”