KATHMANDU, MAR 25-2012
Listed public enterprises (PEs) have not disappointed investors on the dividend front.
A majority of public enterprises have been incurring losses thus turning them into liabilities for the government but a few that are doing well have been distributing handsome dividends to investors.
Recently, Salt Trading Corporation (STC) announced 45 per cent dividend –– 35 per cent stock dividend and 10 per cent cash dividend –– for its stock holders.
There are nine active companies with a majority stake of the government that are listed at Nepal Stock Exchange. All the companies are earning profits, except for Nepal Film Development Corporation, thus giving out dividends to stock holders.
There are still 36 PEs under the government’s control among which only 22 companies are making profits, according to the Economic Survey 2011.
Nepal Telecom (NT) will distribute 45 per cent cash dividend to stake holders. Last year too it had distributed 35 per cent cash dividend. The company with its 150 million unit shares constitutes 25 per cent of the total market capitalisation of the stock exchange. The government holds 92 per cent stake in the telecommunication company.
Among the financial institutions, NIDC Capital Markets and Nepal Awas Bikas Bitta Company will provide dividends of 25 per cent and 15 per cent, respectively. But Agriculture Development Bank has yet to announce any dividend since its listing about two years back.
“These companies are able to give more dividends but being government owned entities there is less pressure on them to appease retail shareholders like other listed companies,” said general secretary of Nepal Investors’ Association Prakash Rajoria, referring to the monopoly enjoyed by government companies.
Most of these government owned companies enjoy a monopoly in their respective areas making it profit generating entities. NT, despite the existence of new telecom companies, enjoys a near-monopoly situation. Likewise, STC has a monopoly over salt distribution nationwide. Chilime Hydropower also being Nepal Electricity Authority’s subsidiary has a ready buyer at hand.
He pointed out that stocks of government companies are for risk aversive investors as they neither give high returns nor fall to an abysmal low. “The government’s backing is an assurance for investors that the chances of the company collapsing is low even during a bad phase unlike companies with private promoters,” he said citing the example of Nepal Bank that was de-listed due to its financial troubles but the hope of the bank again being listed is still intact as shown by its improved condition.
According to experts, during a bearish run, investors look for underlying benefits like cash dividends and bonus shares instead of short-term returns. Even though the short-term return from share investment is non-existent, a handsome dividend can make up for any losses.
Source: THT
Listed public enterprises (PEs) have not disappointed investors on the dividend front.
A majority of public enterprises have been incurring losses thus turning them into liabilities for the government but a few that are doing well have been distributing handsome dividends to investors.
Recently, Salt Trading Corporation (STC) announced 45 per cent dividend –– 35 per cent stock dividend and 10 per cent cash dividend –– for its stock holders.
There are nine active companies with a majority stake of the government that are listed at Nepal Stock Exchange. All the companies are earning profits, except for Nepal Film Development Corporation, thus giving out dividends to stock holders.
There are still 36 PEs under the government’s control among which only 22 companies are making profits, according to the Economic Survey 2011.
Nepal Telecom (NT) will distribute 45 per cent cash dividend to stake holders. Last year too it had distributed 35 per cent cash dividend. The company with its 150 million unit shares constitutes 25 per cent of the total market capitalisation of the stock exchange. The government holds 92 per cent stake in the telecommunication company.
Among the financial institutions, NIDC Capital Markets and Nepal Awas Bikas Bitta Company will provide dividends of 25 per cent and 15 per cent, respectively. But Agriculture Development Bank has yet to announce any dividend since its listing about two years back.
“These companies are able to give more dividends but being government owned entities there is less pressure on them to appease retail shareholders like other listed companies,” said general secretary of Nepal Investors’ Association Prakash Rajoria, referring to the monopoly enjoyed by government companies.
Most of these government owned companies enjoy a monopoly in their respective areas making it profit generating entities. NT, despite the existence of new telecom companies, enjoys a near-monopoly situation. Likewise, STC has a monopoly over salt distribution nationwide. Chilime Hydropower also being Nepal Electricity Authority’s subsidiary has a ready buyer at hand.
He pointed out that stocks of government companies are for risk aversive investors as they neither give high returns nor fall to an abysmal low. “The government’s backing is an assurance for investors that the chances of the company collapsing is low even during a bad phase unlike companies with private promoters,” he said citing the example of Nepal Bank that was de-listed due to its financial troubles but the hope of the bank again being listed is still intact as shown by its improved condition.
According to experts, during a bearish run, investors look for underlying benefits like cash dividends and bonus shares instead of short-term returns. Even though the short-term return from share investment is non-existent, a handsome dividend can make up for any losses.
Source: THT
No comments:
Post a Comment