Cos fail to attract stock investors
Asaduzzaman Pallab | Monday, 7 March 2011
Asaduzzaman Pallab
Despite recommending highly encouraging dividends for the year 2010, the listed companies have failed to attract investors amid continued bearish trend in the stock market. Most of the banks, non-banking financial institutions (NBFIs) and insurance companies declared higher dividends this year compared to those of the previous year. Unlike in the previous year, banks first started to recommend dividends for the year 2010. Among the prominent banks, National Bank declared 95 per cent bonus, Eastern Bank 55 per cent bonus, One Bank 55 per cent bonus, Pubali Bank 35 per cent bonus and 5 per cent cash, Dhaka Bank 35 per cent bonus, Prime Bank 35 per cent bonus and 5 per cent cash and Premier Bank declared 31 per cent bonus shares. On the other hand, of the NBFIs, International Leasing started recommending the dividend bonanza with 60 per cent bonus shares for 2010. Maintaining the trend Lanka-Bangla Finance also declared an encouraging 55 per cent bonus. Prime Finance declared 80 per cent bonus and IDLC Finance declared 65 per cent bonus and 25 per cent cash dividend for their investors. Meanwhile, among the insurance companies Asian Insurance declared 25 per cent cash and 25 per cent bonus and Prime Insurance declared 30 per cent bonus for the year 2010. Despite recommending higher dividends than those of the previous year, most of the companies have, so far, got poor response from the investors. Most of them have lost prices immediately after the corporate declaration, the market insiders said. According to them, the banks and financial institutions have invested very insignificant amounts in the capital market from the beginning of this year (2011) amidst persistent volatility of the market. So investors are not very much optimistic about the first quarter earnings of these financial institutions. In the previous year, the incomes of majority of financial institutions came from the investment of the capital market. Akhter H Sannamat, a market analyst, told the FE Sunday that when the market falls, even encouraging corporate declarations cannot prevent the decline of a particular share price. "There are possibilities that financial institutions, which largely depend on the capital market for their income, will see major decline in the first quarter earnings of this year," said Sannamat adding that the investors should not consider only the first quarter earning of a company but take into account the prospects of earning of the company for the whole year.
Despite recommending highly encouraging dividends for the year 2010, the listed companies have failed to attract investors amid continued bearish trend in the stock market. Most of the banks, non-banking financial institutions (NBFIs) and insurance companies declared higher dividends this year compared to those of the previous year. Unlike in the previous year, banks first started to recommend dividends for the year 2010. Among the prominent banks, National Bank declared 95 per cent bonus, Eastern Bank 55 per cent bonus, One Bank 55 per cent bonus, Pubali Bank 35 per cent bonus and 5 per cent cash, Dhaka Bank 35 per cent bonus, Prime Bank 35 per cent bonus and 5 per cent cash and Premier Bank declared 31 per cent bonus shares. On the other hand, of the NBFIs, International Leasing started recommending the dividend bonanza with 60 per cent bonus shares for 2010. Maintaining the trend Lanka-Bangla Finance also declared an encouraging 55 per cent bonus. Prime Finance declared 80 per cent bonus and IDLC Finance declared 65 per cent bonus and 25 per cent cash dividend for their investors. Meanwhile, among the insurance companies Asian Insurance declared 25 per cent cash and 25 per cent bonus and Prime Insurance declared 30 per cent bonus for the year 2010. Despite recommending higher dividends than those of the previous year, most of the companies have, so far, got poor response from the investors. Most of them have lost prices immediately after the corporate declaration, the market insiders said. According to them, the banks and financial institutions have invested very insignificant amounts in the capital market from the beginning of this year (2011) amidst persistent volatility of the market. So investors are not very much optimistic about the first quarter earnings of these financial institutions. In the previous year, the incomes of majority of financial institutions came from the investment of the capital market. Akhter H Sannamat, a market analyst, told the FE Sunday that when the market falls, even encouraging corporate declarations cannot prevent the decline of a particular share price. "There are possibilities that financial institutions, which largely depend on the capital market for their income, will see major decline in the first quarter earnings of this year," said Sannamat adding that the investors should not consider only the first quarter earning of a company but take into account the prospects of earning of the company for the whole year.