From: LAURENT CHEKROUN (MAKOR SECURITIES LO) At: Jun 1 2016 10:16:43
Subject: >>> Makor Dividend Weekly Report 01-06-16.pdf
The spreads long term against short term are close to historical peaks with a 37% decrease between 2017 and 2023 to 28% between 2019 and 2025.In our view, we estimate the market is worried about i) sustainability of the dividends in the future, ii) beginning of 2016 market fall which increased the stress on the dividend outlook.Historically, spreads between long term and shorter term future dividends tend to widen in difficult times (market fall, difficult economic outlook) and gradually recover over time as shown in the graph below.Between March and June 2012, all 2013 / 2018, 2014 / 2019 and 2015 / 2020 widened by respectively 22%, 19% and 14%.We see here a 16% upside for the first pair, 10% on the second and 5% on the third in a 6 month period.