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 are 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 the more likely thing 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.

MARKETS THIS MORNING-

Asian markets were mostly in the green as Brent Crude’s retreat helped ease inflation fears. Japan’s Nikkei added over 1% while South Korea’s Kospi advanced 2.3%. Hong Kong’s Hang Seng index rose 0.7%, while mainland China’s CSI 300 added 0.6%. Wall Street futures, meanwhile, were mostly unchanged after a positive session for all three US indices following the Federal Reserve’s interest rate hike on Wednesday.

THE CLOSING BELL-

The DFM rose 0.3% yesterday on turnover of AED 1.1 bn. The index is down 1.0% YTD.

In the green: Sukoon Ins. (+15.0%), Islamic Arab Ins. Company (+3.7%), and Takaful Emarat (+3.5%).

In the red: Emirates Reem Investments Company (-3.6%), Ekttitab Holding Company (-2.5%), and Shuaa Capital (-2.2%).

Over on the ADX, the index rose 0.5% on turnover of AED 1.1 bn. Meanwhile, Nasdaq Dubai was up 0.6%.

CORPORATE ACTIONS

Empower’s board of directors is scheduled to approve a AED 437.5 mn dividend for 1H 2026, equal to AED 0.04375 per share, according to a filing (pdf). The payout represents 43.75% of Empower’s total paid-up share capital. Strong demand for district cooling helped boost the company’s 1H net income by 16.25% y-o-y to AED 467.9 mn.