Australian investors’ happy new year, with $9.48 billion in December dividends

The ASX has closed December well up as the holiday trading period and a shower of dividends supports the market.

The ASX has closed December well up as the holiday trading period and a shower of dividends supports the market. Picture: NCA NewsWire / Jeremy Piper

Investors will ring in the New Year $9.48bn richer after a shower of dividends from ASX-listed companies in December.

The payments in recent weeks come as the S&P/ASX200 slid 0.92 per cent to close 2021 at 7444.6 points.

But the market is still up 13.02 per cent from where it started the year, continuing the bull run since its darkest days in 2020.

The funds, flowing into dividend reinvestment plans and the pockets of shareholders, are thought to have assisted in the recent Santa Claus rally, expected by many to continue until mid-January.

Bell Potter’s Richard Coppleson said the dividends, coupled with almost $2bn in monthly inflows to the sharemarket, would see $10.3bn flow into stocks and listed funds.

But Mr Coppleson said some funds would go towards dividend reinvestment plans, or be used by listed funds to pay investors without the need to sell shares.

“It doesn’t all go back into the market, but some of that cash is going to be put in there over the next few days,” he said.

“The real support of the market is the fact that there’s no sellers now and it’s so thin.”

Mr Coppleson said the market was benefiting from the seasonal rally that hits in mid-December.

“The last 40 years it’s been up 85 per cent over that time,” he said.

“Having looked at all the months, dividend-paying months tend to outperform normal months because there’s cash coming in.”

The ASX lifted 2.88 per cent in December.

The big dividend injection comes after a paltry December in 2020, which saw payouts from ASX-listed companies at just 47 per cent of what was paid at the same time in 2019.

Dividends in December 2021 were up 105 per cent on 2020.

“That’s consistent. There’s always about $10bn paid every December,” Mr Coppleson said.

Mr Coppleson said at least $1.08bn was likely to be paid into dividend reinvestment schemes from the big banks.

“The bank dividends are showering down right now,” Mr Coppleson said.

Westpac was the biggest payer of the December season, shelling out $2.2bn in dividends.

This was followed by NAB, which showered investors with $2.19bn in cash.

ANZ dropped $2.02bn in dividends, followed by Macquarie Bank, which poured $1.04bn into investors’ pockets.

Mr Coppleson said investors were now looking at the year ahead and the February season.

“We’ve seen mineral companies having huge runs,” he said.

“There’s a good chance you’re going to see some dividends being paid.”

Figures from Mr Coppleson’s market report show BHP has been the biggest point contributor in the ASX 200 in the last month, with shares up 4.9 per cent.

This was followed by CBA, Goodman Group, and Rio Tinto.

Afterpay was his biggest loser, followed by Transurban and IDP Education.

Novonix was the best performer on the ASX for 2021, up 659.5 per cent. Polynovo was slashed 60.7 per cent, the market’s worst performer.

However, Mr Coppleson noted the market was also facing an inflationary environment, with looming US rate rises.

“No one really knows how that’s going to play out,” he said. “If the US starts putting rates up around May, that’s what everyone expects, you might see the market going down for a couple of months.”