Australian investors facing $26b hit as blue chips slash dividends

5/05/2020 1:21:00 AM

Australian investors facing $26b hit as blue chips slash dividends | @clancyyeates

Australian investors facing $26b hit as blue chips slash dividends | clancyyeates

More than half a million small investors will miss out on dividend payments in coming months.

Westpac, which has 610,000 retail shareholders, became the latest big company to suspend its dividend yesterday as NRMA owner Insurance Australia Group warned it was unlikely to pay a dividend to its 650,000 shareholders in September.Dividend payments in Australia totalled $80 billion last financial year, research from UBS recently found. Dividends and franking credits accounted for 87 per cent of returns from the ASX 200 index over the past decade.

AdvertisementWestpac's dividend suspension was the first such move by the bank in at least 37 years. The company said the deferral was due to economic uncertainty created by the coronavirus pandemic and advice from regulators to preserve capital.The Age,

Read more:
The Sydney Morning Herald »

AFL fans ‘disgusted’ after Yarra boat snub in new-look Grand Final Parade

The re-imagined AFL Grand Final Parade has delivered mixed reviews with the boats not sticking to the course and disappointing thousands of fans. Read more >>

Push for Aussies to return to the officeAustralians will be urged to get back to work at the office as the Morrison Government reveals current restrictions are delivering a $4 billion hit to the economy every week., reports samanthamaiden samanthamaiden Get back to work. samanthamaiden Isn’t this the perfect opportunity to re think our economic system? COVID19 backtowork samanthamaiden Go back to work and wait for the 2nd wave 🌊 Australia ! 😂😂

Testing times: Snorkels, zinc, cord blood and probiotics trialled in COVID-19 fightSnorkel masks could be fitted to the faces of COVID-19 patients in one of almost 40 trials launched by Australian scientists since the start of the pandemic. Australian scientists? You mean the ones at universities that aren't eligible for JobKeeper? Idiots, it’s an Italian project, they’ve been using them for months.... Aussies didn’t invent anything, they just copied it.

Australian economy could take $50 billion hitAustralia&x27;s economy will take a $50 billion hit in the June quarter but things could get a lot worse if restrictions to deal with the coronavirus stay in place. Wel yeah and it will get a whole lot worse if pm isn’t smart in his dealings .....oh bugger

Do we want migrants to return in the same numbers? The answer is noPerspective: Our economic recovery must help all Australians get back on their feet, and to do that we need a migration program that puts Australian workers first, writes Labor senator Kristina Keneally can we trade KK for a refugee on Manus Keep them out. Brilliant suggestion,,,,,100% agree with KK.

Transurban revs up for coronavirus recovery investment spreeTransurban is preparing to buy or fund new toll roads it says governments will need to spur economic recovery, but signalled it could come at the cost of lower dividend payouts. Disgraceful Is anyone surprised ? Profits before People. They are a disgrace. Absolutely no consideration for better urban environments and a better way of moving people and freight.

'Chinese people need to be clean': Australians urged to speak up as coronavirus-related racism rears its headExperts say there is vast underreporting of coronavirus-related racist attacks against Asian-Australians. This is a huge difference between Chinese people and the CCP but for the average Joe they prefer to take out their frustration on the innocent. Uyghurs in prison camps and Falun Gong just disappear in China due to the undemocratic CCP. Our Chinese Australians have nothing to do with what's happened at Wuhan and how the CCP are dealing with their own idiotic incompetence. Keep Communist ideals away from our country and leave our Chinese Australians alone. Everyone is being affected here! 🙌

Larger text size Very large text size The dividend boom that has underpinned 90 per cent of sharemarket returns over the past decade is over with moves by the nation's largest companies to slash shareholder payouts poised to deliver a $26 billion hit to Australian investors.Unprecedented’: Big news for our borders Confirming that the economy is on track to enter into the first recession since the 1990s, the Treasurer will reveal for the first time that the economy is now forecast to go backward in the June quarter.Play video At the moment, doctors strap a breathing mask to a patient's face, and then put an N95 mask on top – a fair solution but one that does not guarantee the patient will not spread the virus.Coronavirus live updates: Trump says it's fine if Australia wins vaccine race; treasury says restrictions wiping $4b a week off economy; Ruby Princess inquiry to hear from new witnesses "Significant sectors of our economy like agriculture, mining and construction have been able to adapt to the new health restrictions and in most cases continue to operate," he will tell the National Press Club, according to extracts of his speech.

Westpac, which has 610,000 retail shareholders, became the latest big company to suspend its dividend yesterday as NRMA owner Insurance Australia Group warned it was unlikely to pay a dividend to its 650,000 shareholders in September. Westpac was the latest big financial institution to suspend a decision on its dividend on Monday. The March quarter figures will be released in June. Credit: Dividend payments in Australia totalled $80 billion last financial year, research from UBS recently found. He thinks his snorkels may present a cheaper and more effective alternative. Dividends and franking credits accounted for 87 per cent of returns from the ASX 200 index over the past decade. Australian Prime Minister Scott Morrison speaks at a press conference at Parliament House in Canberra. Plato Investment Management has predicted a fall of nearly 30 per cent in dividends this year, which would reduce payouts to millions of Australian retail investors and super funds by $26 billion. The number of jobs advertised more than halved in April, a record monthly drop.

But after recent moves from banks the plunge in payments could end up being even bigger. Picture: Hagen Hopkins Source:Getty Images If Australia had introduced an Italian-style lockdown for two months, the adverse impact on GDP would double to 24 per cent, or $120 billion, in the June Quarter. One plans to give probiotics to nurses to see if that reduces their COVID-19-related stress. "The risks are pointed to the downside," Plato managing director Don Hamson said on Monday. Advertisement Jeff Bresnahan, chairman of SuperRatings, said ongoing cuts to dividends meant returns for superannuation funds would probably be negative this financial year. This was the cliff we were standing on,’’ Mr Frydenberg says. ‘‘Not getting that [dividend] income between now and June will have an effect and we will probably see a negative year this year,’’ Mr Bresnahan said. A fourth trial will try high-dose zinc injected straight into COVID-19 patients. Westpac's dividend suspension was the first such move by the bank in at least 37 years. “Some of the hardest-hit sectors like retail and hospitality are among the biggest employers, accounting for more than two million employees between them. "Unleashing the power of dynamic, innovative, and open markets must be central to the recovery, with the private sector leading job creation, not government," he will say.

The company said the deferral was due to economic uncertainty created by the coronavirus pandemic and advice from regulators to preserve capital. “Obviously this was a tough decision. “Recent credit card data from the banks shows that spending on arts and recreational services, accommodation and food services were down around 60 per cent and 70 per cent respectively in late April compared to the previous year,’’ Mr Frydenberg says. "But what this also highlights is the need for co-ordination, collaboration and strategic leadership that overarches all that. We had to balance up the shareholders, we had to balance the strength [of the bank] and we had to take heed of the strong advice from the regulator,” chief executive Peter King said in an interview with the Herald The Age, after the bank delivered a 70 per cent slide in profit. “So we’ve deferred the decision at this point, and we’ll see where we can get to with some more clarity during the course of the year.5 per cent since the start of the year, with declines across all jurisdictions.” Westpac's move comes after ANZ Bank last week also deferred a dividend decision for its 500,000 retail shareholders until at least August." While innovative, scientists say the diversity of approaches to tacking COVID-19 is indicative of a wider problem: the lack of a co-ordinated national research strategy.

IAG, the insurance company behind brands including NRMA, CGU and SGIO also said on Monday it had "limited scope" to pay a dividend for the September half.7 per cent), WA (20. Westpac's dividend payments to all shareholders for the most recent half were worth $2.7 billion, IAG's most recent dividends paid out were worth $231 million, and ANZ's distributions totalled $2.4 per cent), Queensland (18 per cent), South Australia (16.2 billion. The cuts come with a growing number of small investors, including self-funded retirees, flocking to bank stocks for their high dividend yields as interest rates have fallen to record lows.9 per cent).

Self-managed super funds (SMSFs) are also heavily exposed to local shares, with the typical fund holding $272,000 in domestic shares. Chief executive of the SMSF Association, John Maroney, said bank shares would often represent up to a quarter of these holdings, and could have produced a dividend return of about $3,300 to $4,100 based on previous yields. “Reassuringly, National Cabinet has signalled that from this Friday, it will assess more opportunities for easing restrictions, building on decisions already taken to date, such as around elective surgery, or in some states, limited gatherings, and visitations. Mr Bresnahan, said dividends were an important part of total shareholder returns and they gave the big super funds franking credits. Mr Bresnahan said the typical balanced fund was down 6. Picture: Mick Tsikas Source:AAP Central to the back-to-work strategy is reopening schools.7 per cent in the nine months to March.

Partner at Deloitte Access Economics, Chris Richardson, said that despite the severe impact on some shareholders, it was generally right for companies to cut dividends at a time of economic crisis. In Queensland, that will now occur later this month with NSW also planning a staggered return to classes. “There’s a stunning amount of pain through the economy, and it’s getting shoved left right and centre,” Mr Richardson said. . But as Victoria reported a new confirmed COVID case involving a teacher and NSW confirmed a 7-year-old schoolboy attending a public school had tested positive, NSW Premier Gladys Berejiklian warned Australians should expect more cases as schools reopen.