Middle East dividends hit USD 44.6 bn in 2Q as the region sits out the global buyback boom

Middle East dividends kept climbing in 2Q. Companies in the region distributed USD 44.6 bn, up 5.5% y-o-y on an underlying basis, according to Janus Henderson’s Global Dividends & Buybacks Index (pdf). Saudi Arabia supplied nearly two-thirds at USD 28.4 bn, up 2.4% y-o-y, followed by the UAE at USD 13.6 bn, up 7.3%. Kuwait was the fastest-growing market, with payouts jumping 45% y-o-y during the quarter to USD 1.8 bn.

Buybacks barely got a look-in: Middle Eastern companies repurchased just USD 600 mn of shares during the quarter — a fraction of the region’s dividend bill. The UAE accounted for USD 200 mn, while Saudi Arabia and Qatar each recorded just USD 100 mn.

Aramco explains much of Saudi’s dominance. The oil giant remained the world’s largest dividend payer, accounting for 3.1% of dividends among the 1.5k companies tracked and nearly half of the Middle East’s total. Aramco entered 2026 after distributing USD 85.5 bn in dividends last year, down from more than USD 120 bn in 2024, while launching its first-ever USD 3 bn share repurchase program.

Globally, the balance looks very different: Share repurchases jumped 26.8% y-o-y to an estimated USD 572 bn in 2Q, alongside USD 757.8 bn in dividends, which grew 7.3% on an underlying basis. Every region tracked by the index recorded dividend growth.

Tech is driving the buyback boom: The tech sector overtook financials as the world’s largest source of buybacks, repurchasing USD 121.1 bn of shares, with its dividends jumping 23.5% on an underlying basis to USD 70.5 bn — the fastest growth of any industry. Financials remained the dividend heavyweight, distributing USD 239.7 bn and repurchasing another USD 104 bn.

The catch? AI isn’t getting cheaper: Big tech is spending record sums on data centers and computing capacity — and is still buying back stocks at a rapid pace. Cash buffers are shrinking as a result, and some companies are turning to debt to keep funding both. Janus Henderson’s read: if AI spending keeps climbing, buybacks — not dividends — are more likely to get cut.

Why buybacks go first: Regular dividends are harder to cut once established, while repurchases let companies return surplus capital without committing to permanently higher payouts. Banks have increasingly leaned on that flexibility after rebuilding their dividend bases following the global financial crisis.

Not everyone has room to keep paying more: Consumer discretionary was the only major industry to record falling underlying dividends in 2Q, down 3%. German automakers were a particular weak spot, with softer demand and intensifying competition from Chinese EV makers contributing to per-share dividend cuts at Volkswagen and Mercedes-Benz.

For now, payouts are still heading higher: Janus Henderson expects global dividends to grow another 5-6% in 2026 and buybacks to rise 7-8%. For tech, the question is how long companies can keep ramping up AI investment before buybacks — the more flexible half of shareholder returns — have to give.

THE CLOSING BELL: TADAWUL-

The TASI remained flat yesterday on turnover of SAR 5.3 bn. The index is up 2.7% YTD.

In the green: Saudi Company For Pharmaceutical Industries (+8.8%), National Medical Care (4.3%), and Jamjoom Pharmaceuticals Factory (+3.9%).

In the red: Musharaka REIT Fund (-6.4%), Takween Advanced Industries (-5.4%), and Armah Sports (-5.0%).

THE CLOSING BELL: NOMU-

The NomuC rose 0.1% yesterday on turnover of SAR 14.2 mn. The index is down 8.2% YTD.

In the green: AlBattal Factory (+10.0%), Keir (+9.0%), and Saudi Top (+7.5%).

In the red: Dar Almarkabah for Renting Cars (-9.5%), First Avenue for Real Estate Development (-9.1%), and Arabian Food and Dairy Factories (-9.0%).

CORPORATE ACTIONS-

Saudi Printing and Packaging Co. shareholders will vote on 26 October on an 89.42% capital reduction to write off SAR 583.1 mn in accumulated losses, taking the company’s capital to SAR 68.97 mn from SAR 652.07 mn, Argaam reports. The reduction would be carried out by cancelling 58.31 mn shares, or 0.8942 shares for every share held.