BP and Shell … account for a fifth of all investment income from the UK stock market.
Shell in particular not cutting payouts since the second world war, it would feel like the final domino falling for income investors.
Shell shares have tumbled 39% this year, having plunged as much as 60% at the lows of the coronavirus crash, while shares in BP have dropped a third. Yields on the oil giants are running at precipitous highs of 10.7% and 10.3% respectively.
Do you think they will cut their dividends?
I think they will pay out a scrip dividend, and heavily encourage investors to pickup more shares at their current discount rather than taking cash. That said the income funds and pensions which back these firms will have little choice other than to take the cash.