Australian Stocks' Worst-Ever Start Has Investors Eyeing Payouts
- Eight of nation's 10 biggest firms forecast to lift dividends
- Australia dividend yield more than double that of the S&P 500
The closing figure of the S&P/ASX 200 Index, right, is displayed alongside the FTSE Straits Times Index on a screen at the Australian Securities Exchange (ASX Ltd.) headquarters in Sydney, Australia, on Friday, Dec. 30, 2011. The S&P/ASX 200 fell for the second straight year in 2011, marking its first back-to-back annual drop since Bloomberg records began in 1993 as investors become less willing to pay for earnings growth.
Photographer: Ian Waldie/BloombergAustralia’s stock market needs its dividends more than ever.
The worst start to a year on record for the S&P/ASX 200 Index left the gauge on the cusp of a bear market as commodity producers and banks sank amid a global selloff. The selloff was so steep -- 7 percent in seven days -- that even as analysts pared payout forecasts for companies including BHP Billiton Ltd., the index’s forward dividend yield got higher. With equities offering 2.4 percentage points of extra yield compared with government bonds, almost seven times the spread in the U.S., Shaw and Partners Ltd. and Rivkin Securities say the difference is too compelling to ignore.