Global dividends are set to fall as much as 35 per cent this year as the coronavirus continues to cut through economies around the world.

Dividends in the first quarter were almost entirely unaffected by the Covid-19 pandemic, according to the latest Global Dividend Index from Janus Henderson, but for the rest of the year the impact will be significant.

Janus Henderson said it is withdrawing its annual estimate and has a range based on a best and worst case scenario as a guide to how 2020 may look.

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The best case incorporates only those dividend cuts that have already been announced, or that are very likely to be.

This suggests global payouts will fall 15% this year to $1.21 trillion, a decline of $213 billion. The worst case also includes all those that are vulnerable and suggests global payouts could fall 35% this year, dropping to $933bn.

The first quarter represented a temporary peak for the index. Global payouts rose 3.6% on a headline basis to a first-quarter record of $275.4bn, equivalent to underlying growth of 4.3%.

The US and Canada each saw all-time quarterly records, while Japan, Hong Kong, and Russia broke records. The index of global payouts rose to a record 196.3.

Later in the year, from a sector perspective, banks, consumer discretionary, and certain industrial sectors, like aerospace, are most at risk.

Ben Lofthouse, co-manager at Janus Henderson, said: “This downturn does look likely be very steep, but the support from governments and central banks has been on an unprecedented scale, which we can only hope will make any recovery swift. Dividend suspensions are inevitable.”