Stock dividends, rights galore in 2009
Thursday, 28 January 2010
Kayes M Sohel
Though Dhaka Stock Exchange (DSE) saw an influx of shares in the forms of stock dividends and right shares in 2009, it was lower than expectation due to the global economic downturn, said analysts.
They said most of the listed companies, particularly the banks and non-banking financial institutions (NBFIs), declared lesser stock dividends and right shares than the previous year, as they had to bear the brunt of the recession.
They however are hopeful that the scenario might change in 2010, as the banks and NBFIs would go for raising capital beyond their regulatory limit to minimise risk against bad debts and accommodate additional funds to supply later to the clients, as the pace of the economy is getting swifter.
The current year may also see a turnaround, if the government ensures smooth supply of electricity and gas for boosting the country's economy, analysts said.
In 2009, the value of stock dividends made available to the shareholders stood at Tk 18.54 billion, up by 30 per cent from Tk 14.41 billion in 2008, which was 92 per cent higher than 2007.
Right shares also posted a rise of 15.16 per cent or Tk 2.43 billion in 2009 from Tk 2.11 billion in 2008, though in 2008 right shares registered a rise of 252.0 per cent than 2007.
"2009 was a bad year for the banks and NBFIs because of the global recession," said Akter H Sannamat, managing director of Prime Finance and Investment Ltd.
He, however, said, "Banks and NBFIs, particularly the big ones, would have to strengthen their capital base for minimising the risk as well as for providing additional funds for entrepreneurs."
The stock dividends and right shares accounted for 11.29 per cent and 1.49 per cent respectively of the total number of shares of the bourse in 2009, while arrival of shares through stock dividends and right shares were 11.21 per cent and 1.64 per cent respectively in 2008.
A total of 107 listed companies disbursed stock dividends in 2009 against 82 in 2008, while 12 companies declared right shares in 2009 against seven in 2008. In 2009, 124 companies and mutual funds declared cash dividends against 128 in 2008.
"The stock market needs supply of adequate shares from good companies, as the demand has increased manifold in recent years with the expansion of stock trading across the country," Sannamat said.
"The new year will hopefully see more shares coming in the forms of stock dividends and right shares, and through new initial public offering (IPO)," he added.
Last year, five companies paid dividends to their shareholders at rates above 100 per cent, three at rates from above 50 per cent to 100 per cent, 10 at from 30 to 50 per cent, 17 at rates above 20 to 30 per cent, 64 at rates from 10 to 20 per cent, and 25 at rates below 10 per cent, the DSE statistics showed.
Sector-wise average dividend distribution performance shows that 13 sectors paid dividends above 10 per cent in 2009, compared to 11 sectors in 2008.
Through IPO, 1616789997 shares arrived in the market in 2009 against 229400000 in 2008, while through direct listing 36300000 shares were floated in 2009 against 180670512 shares in 2008.
The market was swamped with IPOs of 18 companies worth Tk 23.15 billion in 2009, against 12 IPOs worth Tk 8.28 billion in 2008. Of the total amount of IPOs, Tk 8.92 billion was offered for the public and Tk 15.26 billion for sponsors.
In 2009, 232 companies held annual general meeting compared to 245 in 2008.
Though Dhaka Stock Exchange (DSE) saw an influx of shares in the forms of stock dividends and right shares in 2009, it was lower than expectation due to the global economic downturn, said analysts.
They said most of the listed companies, particularly the banks and non-banking financial institutions (NBFIs), declared lesser stock dividends and right shares than the previous year, as they had to bear the brunt of the recession.
They however are hopeful that the scenario might change in 2010, as the banks and NBFIs would go for raising capital beyond their regulatory limit to minimise risk against bad debts and accommodate additional funds to supply later to the clients, as the pace of the economy is getting swifter.
The current year may also see a turnaround, if the government ensures smooth supply of electricity and gas for boosting the country's economy, analysts said.
In 2009, the value of stock dividends made available to the shareholders stood at Tk 18.54 billion, up by 30 per cent from Tk 14.41 billion in 2008, which was 92 per cent higher than 2007.
Right shares also posted a rise of 15.16 per cent or Tk 2.43 billion in 2009 from Tk 2.11 billion in 2008, though in 2008 right shares registered a rise of 252.0 per cent than 2007.
"2009 was a bad year for the banks and NBFIs because of the global recession," said Akter H Sannamat, managing director of Prime Finance and Investment Ltd.
He, however, said, "Banks and NBFIs, particularly the big ones, would have to strengthen their capital base for minimising the risk as well as for providing additional funds for entrepreneurs."
The stock dividends and right shares accounted for 11.29 per cent and 1.49 per cent respectively of the total number of shares of the bourse in 2009, while arrival of shares through stock dividends and right shares were 11.21 per cent and 1.64 per cent respectively in 2008.
A total of 107 listed companies disbursed stock dividends in 2009 against 82 in 2008, while 12 companies declared right shares in 2009 against seven in 2008. In 2009, 124 companies and mutual funds declared cash dividends against 128 in 2008.
"The stock market needs supply of adequate shares from good companies, as the demand has increased manifold in recent years with the expansion of stock trading across the country," Sannamat said.
"The new year will hopefully see more shares coming in the forms of stock dividends and right shares, and through new initial public offering (IPO)," he added.
Last year, five companies paid dividends to their shareholders at rates above 100 per cent, three at rates from above 50 per cent to 100 per cent, 10 at from 30 to 50 per cent, 17 at rates above 20 to 30 per cent, 64 at rates from 10 to 20 per cent, and 25 at rates below 10 per cent, the DSE statistics showed.
Sector-wise average dividend distribution performance shows that 13 sectors paid dividends above 10 per cent in 2009, compared to 11 sectors in 2008.
Through IPO, 1616789997 shares arrived in the market in 2009 against 229400000 in 2008, while through direct listing 36300000 shares were floated in 2009 against 180670512 shares in 2008.
The market was swamped with IPOs of 18 companies worth Tk 23.15 billion in 2009, against 12 IPOs worth Tk 8.28 billion in 2008. Of the total amount of IPOs, Tk 8.92 billion was offered for the public and Tk 15.26 billion for sponsors.
In 2009, 232 companies held annual general meeting compared to 245 in 2008.