- Senior Managing Director, Equity Research Analyst
Singapore, Intermediary
Change
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Asia has long attracted investors with its diversified markets and fast-growing economies — themes that remain firmly intact. Today, this foundation is reinforced by technological innovation, supportive policy measures, and a weaker US dollar, sparking renewed interest in the region. Amid macroeconomic uncertainty and geopolitical shifts, quality dividend investing offers a compelling blend of income and resilience, making Asia a timely opportunity for dividend-focused equity strategies.
Why quality + dividends matter in Asia
Dividends have historically been a significant driver of total returns in Asian equity markets, contributing 65% of long-term performance (Figure 1). Quality and dividends have also historically outperformed the broader market in Asia, underscoring the power of compounding and the strength of quality businesses.
Quality and dividends often go hand in hand. While dividends provide a direct component of total returns, their sustainability and growth depend on the quality of a company’s earnings and balance sheet. Quality businesses — those with strong management, sound governance, and a durable competitive edge — tend to generate healthy cash flows and maintain robust financial positions. This financial strength gives them flexibility to return capital to shareholders while reinvesting for growth. These attributes support consistent dividend payouts and help companies navigate economic downturns. Historically, dividend growers and payers have outperformed non-dividend payers (Figure 2), reinforcing the value of quality dividend strategies in Asia.
A fertile ground for dividend investing
Asia offers one of the richest and most diverse landscapes for dividend investing, boasting the highest number of dividend-paying companies worldwide — accounting for 33% of the global high dividend universe.1 Opportunities span traditional sectors such as financials and REITs, alongside growth-oriented areas like technology and consumer services. For example, semiconductor giants in Taiwan and South Korea have been among the most consistent income payers while offering exposure to structural trends like AI. Meanwhile, India and Southeast Asia present dividend opportunities tied to rising domestic consumption and the rapid expansion of the middle class.
Despite this high prevalence, Asia’s payout ratio stands at 38%, lower than Europe’s 72%, and developed markets at 44%,2 leaving room for growth as companies increasingly prioritize shareholder returns. This trend is accelerated by governance reforms across the region.
Reforms driving shareholder value
One of the most exciting developments in Asia is the wave of corporate governance and capital market reforms sweeping across the region. Japan’s successful stewardship and governance initiatives have set a precedent, inspiring similar programs in Korea, China, Thailand, and Malaysia. Korea’s “Value-up” program, for instance, aims to enhance shareholder value through improved transparency and better alignment of interests between controlling and minority shareholders.
China is also a critical part of this story. While sentiment has been cautious, the country is undergoing a profound economic transition from a debt-driven model to a global manufacturing and technology powerhouse. Recent policies — tightening governance, encouraging dividends and share buybacks, and recruiting long-term “patient capital” from domestic insurers and state pension schemes — are rebuilding trust and reshaping the market into a more investor-friendly ecosystem. While concerns around domestic growth and US tariffs persist, China is slowly returning to investors’ radar.
The direction is clear: Asia is becoming more shareholder-friendly, creating fertile ground for dividend growth.
Investment implications
Asia’s dividend story is not just about income — it’s about quality, growth, and resilience. We see ample quality dividend opportunities across the region’s diverse markets. These range from global technology leaders in Taiwan, Korea, and China benefiting from AI-driven demand, to REITs across both developed and emerging markets, and domestically anchored companies such as regional banks and insurers that are more insulated from external shocks and positioned to capture long-term domestic structural tailwinds.
At the same time, while implementation timelines vary and expectations may already be priced in for some markets, governance reforms are unlocking shareholder value, creating attractive prospects in companies embracing these changes. In an environment of slower global growth and higher uncertainty, staying invested in Asia’s quality dividend leaders may offer not only long-term capital appreciation, but also potential for attractive income and downside resilience.
1Sources: MSCI and FactSet, as of 31 March 2025. Asia ex Japan accounts for 33% of the global universe of companies with market capitalization above USD 3 billion and dividend yields over 3%. | 2Source: Bloomberg, as of 30 September 2025. Asia represented by MSCI AC Asia ex Japan, developed markets represented by MSCI World, and Europe represented by MSCI Europe.
Monthly Market Review — October 2025
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