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Global dividends fall in Q2 as the US dollar soars in value, but underlying growth is strong

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Global dividends fall in Q2 as the US dollar soars in value, but underlying growth is strong

2015 forecast upgraded to $1.16 trillion from $1.13 trillion due to strengthening underlying dividend trends.

Global dividends fell 6.7% year on year in the second quarter to$404.9bn, a decline of $29.1bn, according to a study performed by global asset manager Henderson Global Investors. This is the third consecutive quarter of declines, mainly owing to the strength of the US dollar against major world currencies.

The euro, yen and Australian dollar were all a fifth weaker year on year and sterling was down a tenth. The rising dollar knocked a record $52.2bn off the value of dividends paid during the quarter.

US companies grew their dividends rapidly, with almost every sector increasing payouts.

Underlying growth, however, which strips out exchange rate movements, special dividends, index changes and changes in the timing of payments, was an encouraging 8.9%.

Q2 is dominated by Europe ex-UK, so trends in that region characterize the global results this quarter, and largely explain the weak headline global growth figure. Two thirds of Europe's dividends are paid in the period and these fell 14.3% on a headline basis (to $133.7bn), with most countries seeing double digit declines. This was almost entirely due to the sharply lower euro against the US dollar. Underlying growth was 8.6%, an impressive result for the region with Italy, the Netherlands and Belgium enjoying the strongest underlying growth. The region's financials significantly increased their payouts, led by Allianz in Germany, part of a growing trend around the world. Danish shipping conglomerate Moller Maersk paid a very large special dividend, while France, the region's largest payer, saw a slowdown, with weakness at Orange and GDF Suez affecting growth there.

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