World’s Best-Yielding Stock Market Is Set to Get Even Better

(Bloomberg) -- The best-yielding equities benchmark among the 12 biggest stock markets in the globe is set to get even better.

Dividend yield for Australia’s S&P/ASX 200 Index, already a world-beater last year, is projected to widen in 2017 as company profits increase, according to data compiled by Bloomberg. February’s earnings season will show a “broad improvement” amid higher commodity prices, continued public-sector spending and a stronger-than-expected labor market, Macquarie Wealth Management said last month.

This year, the ASX 200’s yield is projected to widen to 4.51 percent from 4.09 percent at the end of 2016, data compiled by Bloomberg show. London’s FTSE 100 is forecast to be the runner-up again, with its yield expanding to 4.22 percent from 3.99 percent.

In Australia, blue chips are expected to lead the way, according to Bloomberg forecasts. BHP Billiton Ltd., the second-biggest company by market value after Commonwealth Bank of Australia, is projected to increase its interim dividend 56 percent after a reduction last year.

“The turnaround in commodity prices has helped the miners,” said William O’Loughlin, Australia investment analyst at Rivkin Securities. “It seems pretty likely that a lot of the miners will increase their dividends.”

One exception is BHP competitor Rio Tinto Group, the only company among the 10 biggest forecast to cuts its interim payment. The two miners lie on the opposite ends of the spectrum in terms of dividend growth among the top 50 Australian companies for this period.

To contact the reporters on this story: Tim Smith in Sydney at tsmith58@bloomberg.net, Vivek Shankar in Sydney at vshankar3@bloomberg.net. To contact the editors responsible for this story: Divya Balji at dbalji1@bloomberg.net, Teo Chian Wei