Companies in the Asia-Pacific region are slashing dividends at the fastest pace in more than a decade as the COVID-19 pandemic upends business plans and clouds the outlook for earnings.
About 23 percent of the MSCI Asia Pacific Index members have scrapped or reduced payouts this year, according to data through July 20 compiled by Bloomberg.
That is the most for such a period since 2009, when 41 percent of index companies took such steps in the aftermath of the global financial crisis.
Firms listed in China and Hong Kong make up a majority of those scrapping dividends, followed by corporates in Japan and Australia.
Having slammed company profits around the world, the uncertain duration and nature of the pandemic is increasing pressure on firms globally to preserve cash. Global payouts could contract by 15 percent to 35 percent this year — dropping to US$933 billion in the worst-case scenario, a study published in May by Janus Henderson Investors said.
“The lack of a mass market solution to alleviate the disruptions caused by the virus may lead to a continued impact on corporate performance and dividends alike,” IG Asia Pte Ltd analyst Pan Jingyi (潘婧怡) said.
North Asian markets such as China, South Korea and Taiwan would “continue to be favored” on the back of better management of the pandemic, she added.
While the stock index has surged 38 percent from its year-to-date low, a resurgence of the virus in places such as Australia and Hong Kong is threatening to delay the region’s economic recovery.
The consumer discretionary and materials sectors have seen the highest instances of scrapped payouts, with companies including Nissan Motor Co, Wanda Film Holding Co (萬達院線) and Japan Airlines Co having suspended dividends.
Still, the region has fared better than Europe, where about half of the Stoxx Europe 600 Index members either scrapped or reduced their payouts, while in the US, only 63 of the S&P 500 Index members announced such moves.
‘DECENT RESULTS’: The company said it is confident thanks to an improving world economy and uptakes in new wireless and AI technologies, despite US uncertainty Pegatron Corp (和碩) yesterday said it plans to build a new server manufacturing factory in the US this year to address US President Donald Trump’s new tariff policy. That would be the second server production base for Pegatron in addition to the existing facilities in Taoyuan, the iPhone assembler said. Servers are one of the new businesses Pegatron has explored in recent years to develop a more balanced product lineup. “We aim to provide our services from a location in the vicinity of our customers,” Pegatron president and chief executive officer Gary Cheng (鄭光治) told an online earnings conference yesterday. “We
It was late morning and steam was rising from water tanks atop the colorful, but opaque-windowed, “soapland” sex parlors in a historic Tokyo red-light district. Walking through the narrow streets, camera in hand, was Beniko — a former sex worker who is trying to capture the spirit of the area once known as Yoshiwara through photography. “People often talk about this neighborhood having a ‘bad history,’” said Beniko, who goes by her nickname. “But the truth is that through the years people have lived here, made a life here, sometimes struggled to survive. I want to share that reality.” In its mid-17th to
LEAK SOURCE? There would be concern over the possibility of tech leaks if TSMC were to form a joint venture to operate Intel’s factories, an analyst said Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday stayed mum after a report said that the chipmaker has pitched chip designers Nvidia Corp, Advanced Micro Devices Inc and Broadcom Inc about taking a stake in a joint venture to operate Intel Corp’s factories. Industry sources told the Central News Agency (CNA) that the possibility of TSMC proposing to operate Intel’s wafer fabs is low, as the Taiwanese chipmaker has always focused on its core business. There is also concern over possible technology leaks if TSMC were to form a joint venture to operate Intel’s factories, Concord Securities Co (康和證券) analyst Kerry Huang (黃志祺)
‘MAKE OR BREAK’: Nvidia shares remain down more than 9 percent, but investors are hoping CEO Jensen Huang’s speech can stave off fears that the sales boom is peaking Shares in Nvidia Corp’s Taiwanese suppliers mostly closed higher yesterday on hopes that the US artificial intelligence (AI) chip designer would showcase next-generation technologies at its annual AI conference slated to open later in the day. The GPU Technology Conference (GTC) in California is to feature developers, engineers, researchers, inventors and information technology professionals, and would focus on AI, computer graphics, data science, machine learning and autonomous machines. The event comes at a make-or-break moment for the firm, as it heads into the next few quarters, with Nvidia CEO Jensen Huang’s (黃仁勳) keynote speech today seen as having the ability to
RSS