NZX: New Zealand shares edges down: Weak offshore leads

New Zealand Stock Markets

New Zealand shares fell, on weak offshore leads and local stocks giving up dividend rights, with Sky Network Television, New Zealand Refining Co and Mercury New Zealand declining.

The S&P/NZX50 Index dropped 40.51 points, or 0.5 percent, to 8,432.63. Within the index, 21 stocks fell, 21 were unchanged, and eight rose. Turnover was $154 million.

The ASX 200 was down 0.8 percent, Hong Kong's Hang Seng had fallen 1.3 percent and Japan's Nikkei 400 had dropped 0.7 percent.

Sky Network Television was the worst performer on the local index, down 5.8 percent, or 13 cents, to $2.11. It gave up rights to a 7.5 cent interim dividend.

New Zealand Refining Co fell 4.5 percent, or 11 cents, to $2.35. It shed a 12 cent final dividend. Other benchmark index stocks to give up dividends today were Mercury New Zealand, which dropped 4.5 cents to $3.225, compared to its 6 cents per share interim dividend; Investore Property, which dropped 3 cents to $1.38 while shedding a 1.86 cent dividend; Vital Healthcare, which dropped 1 cent to $2.12, compared to its 2.125 cent dividend; and Metlifecare, which shed 1 cent to $5.84 while dropping a 3.25 cent dividend.

Synlait Milk was the best performer, up 2.3 percent to $8.08. Heartland Bank rose 1.7 percent to $1.80 and Z Energy gained 1.2 percent to $6.95.

Outside the benchmark index, Trilogy International gained 2.2 percent to $2.83. It is set to de-list from NZX with shareholders backing a $211 million takeover from China's Citic Capital Partners at today's special meeting. The deal will see the Chinese investment firm pay $2.90 a share to take over the listed skincare products and scented candle maker.

StanChart resumes dividend payout as 2017 profit soars

European Stock Markets

Standard Chartered Plc resumed paying dividends after posting a six-fold jump in annual pretax profit on Tuesday, but weaker-than-expected revenue figures dampened any celebration from investors. 

A restructuring plan spearheaded by CEO Bill Winters, who arrived in 2015 and has since cut more than 5,000 jobs and dumped entire business lines including Asian equities, has helped the bank cope with hefty bad debts piled on its books. 

Years of over-exuberant lending saw the emerging markets-focused bank, which makes the bulk of its income in Asia, cancel its dividend in 2015 after posting its first loss in a quarter of a century the previous year. 

After reporting a $2.41 billion (1.7 billion pounds) pretax profit for 2017, up from $409 million the year before, it proposed to restore a full-year dividend of 11 U.S. cents per ordinary share. 

But profit was below the $2.7 billion average of 10 analysts’ estimates, and the bank also fell short of expectations on income after a weak performance in its financial markets business. 

StanChart shares were up 2.1 percent to 847.2 pence at 0905 GMT, with the resumption of the dividend helping sentiment.  

Winters said priorities for 2018 centred on fulfilling the potential the bank’s management believes is there but has not yet been fully realised, including by increasing efficiency and investing in innovation and people. 

Operating income, closely watched by investors who want StanChart to deliver profit from core business growth rather than lower provisions for bad loans, was up nearly 3 percent to $14.43 billion for the full year.

London-headquartered StanChart is looking to drive returns by boosting lending to key industrial sectors and top clients, sources told Reuters earlier this month.

CEO Winters said on Tuesday StanChart needed to establish income growth momentum across all its businesses, which will help it generate income at a new target compound annual growth rate of 5-7 percent in the medium term.

The results showed that some of its business lines are still struggling to deliver.

Underlying income in the corporate and institutional banking division fell 3 percent year-on-year, as its financial markets unit suffered from the low global market volatility in 2017 that dampened trading activity and dragged income down by $490 million.

StanChart’s private banking division reported a small $1 million loss for the year, as costs rose from investments. It, however, did see $2.2 billion of new money flow into the private bank, compared to the previous year when it saw $2 billion flow out.

The bank’s core capital ratio, another closely watched measure of lenders’ financial strength, remained unchanged at 13.6 percent last year compared to 2016, but above the lender’s targeted range of 12 percent to 13 percent. 

Global dividends hit record of $1.25 trillion in 2017, more to come

Global Stock Markets

Global dividends rose 7.7 percent to an all-time high of $1.25 trillion (£891 billion) last year boosted by a buoyant world economy and rising corporate confidence, Janus Henderson (JHG.N) said on Monday, predicting another record year ahead.

The surge - the strongest since 2014 - was driven by increases in every region and almost every industry with record showings in 11 countries including the United States, Japan, Switzerland, Hong Kong, Taiwan and the Netherlands, the investment manager added.

For 2018 Janus Henderson expects dividends to keep the same 7.7 percent growth rate to reach around $1.35 trillion, as corporate and economic growth remains strong even in more volatile financial markets.

Royal Dutch Shell (RDSa.L) kept its position as the world’s biggest dividend payer. China Mobile (0941.HK) rose to second from 19th last year and was followed by Exxon Mobil (XOM.N), Apple (AAPL.O) and Microsoft (MSFT.O), the report said.

The top 20 payers accounted for 15.7 percent of the total payout.

Adjusting for movements in exchange rates, special one-off dividends and other factors, global dividends rose 6.8 percent last year and are expected to rise another 6.1 percent in 2018.

Janus said 2017’s dividend growth showed less regional divergence than in previous years, reflecting the broadly based global economic recovery, though Europe lagged behind.

European dividends rose just 1.9 percent to $227 billion, weighed down by cuts from a handful of large companies in France and Spain, lower special dividends and a weak euro during the second quarter, when most dividends are paid, it said.

In the UK, headline growth was held back at 3 percent by the weak pound, but underlying growth was 10 percent as UK-listed multinational mining companies rapidly restored dividends that had been cut during the lean years for commodity prices.

The Asia Pacific region posted the strongest headline growth rate of 18.8 percent to 139.9 billion, followed by Emerging Markets, up 16.5 percent to $102.4 billion, while dividends in North America grew 6.9 percent to a record of $475.6 billion.

Janus said every industry saw higher underlying dividends in 2017 except telecoms, which was flat. The mining industry saw by far the fastest growth, up 27.2 percent on an underlying basis.