Corporate dividends in Saudi Arabia and other Gulf countries may be starting to shrink as companies find it harder to raise funds, forcing them to cut payouts.
For many years, high dividend yields have lured investors to Gulf bourses, partly offsetting factors such as limited trading liquidity, erratic regulation and poor corporate disclosure of information.
In 2015 dividend yields in the six-nation Gulf Cooperation Council averaged about 4.5 percent; the average for emerging markets was 3 percent, Deutsche Bank estimated.
Cheap oil is now threatening that pattern. Economic growth is slowing as reduced oil revenues force governments to cut spending; Moody's predicts Saudi gross domestic product will expand 2.8 percent this year, against an average 5.7 percent between 2010 and 2015. This will crimp corporate profits.
Austerity in the Saudi 2016 budget - higher fuel, electricity and natural gas feedstock prices - will raise costs of many listed companies by several percentage points this year, the firms said. Future budgets may contain more austerity.
Meanwhile it has become more expensive to raise funds from capital markets with fewer new petrodollars flowing through economies. Market interest rates have risen sharply.
So if oil stays low for years, some companies may sacrifice parts of their dividend payments to raise cash needed for operations and expansion.
In Saudi Arabia, there are initial signs of this. Total dividend payments by listed companies fell about 5 percent to 62 billion riyals ($16.5 billion) last year, Riyad Capital calculated.
Companies limited the drop by eating into their profits; payouts totalled 64 percent of profits last year, up from 57 percent in 2014. But this ratio cannot increase indefinitely without hurting firms' ability to reinvest in their businesses.
"Raising capital has become a key obstacle, and companies with deteriorating cash profiles need to figure out whether they want to distribute some back to investors or retain some for capital expenditure," said Mohammed al-Shammasi, director at Riyadh-based Derayah Financial.
Retailer United Electronics said it would not distribute dividends for the fourth quarter of 2015 to finance expansion plans. Home appliance importer Shaker said it would not distribute dividends for 2015 to support future growth and its balance sheet.
Dividends in Saudi Arabia's petrochemical sector, its profit margins linked to prices of oil and natural gas feedstock, appear among the most vulnerable.
Loss-making petrochemical producers such as National Industrialisation are not expected to pay dividends for 2015 or 2016, analysts at AlJazira Capital said; other firms may cut back.
Outside Saudi Arabia, Industries Qatar, a petrochemicals, metals and fertiliser producer, proposed a 2015 dividend of 5 riyals, down from 7 riyals.
The Saudi cement sector may be vulnerable because it is exposed to construction activity in the kingdom, which has been falling with lower state spending. The sector currently offers a high dividend yield of 10 percent.
Santhosh Balakrishnan at Riyad Capital said the industry was less burdened by debt than others so it should be able to maintain dividends. But Arabian Cement said it is proposing a dividend for the second half of 2015 of 2.5 riyals, down from 3.25 riyals a year ago.
For the Gulf as a whole, the most important sector is likely to be banks, because they are heavily weighted in markets. For 2015, most banks maintained payouts with only a few exceptions such as Doha Bank in Qatar and Abu Dhabi's Union National.
NBAD Securities predicts Qatari banks will offer dividend yields of 5 to 9 percent in 2016, slightly above their historical range of 4 to 8 percent.
"Banks with lower capital adequacy ratios may cut dividends, as Doha Bank did, but overall it is not a main concern for the banking sector," said Chiradeep Ghosh at Bahrain-based SICO.
That may change if there is a protracted period of low oil prices. In a letter to banks at end-2015, for example, Oman's central bank warned it might intervene in bank dividend payments to ensure lenders kept enough capital to meet requirements.
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