LONDON: European dividend futures are stirring from their months-long slumber, reflecting investor expectations that positive COVID-19 vaccine updates on top of trillions of dollars in stimulus will fast-track an anticipated recovery in company profits.
"Financials will hopefully be a key source of dividend growth next year," Morgan Stanley analysts told clients. Futures suggest that even in 2026-2028, euroSTOXX 50 dividends will remain 20 per cent below pre-pandemic levels.Less gloomy data from IHS Markit still shows euro STOXX and FTSE dividends 15 per cent and 25 per cent below pre-pandemic levels respectively in 2022. US payouts, however, are seen rebounding to pre-pandemic levels by end-2020.
"I think some of the value rotation moves are a bit overdone," JPMorgan analyst Nikolaos Panigirtzoglou said, referring to the rush into banks, travel and industrial shares.
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