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Investors race to buy up shares in anticipation of dividend payouts
Investors are racing to buy more shares in order to participate in year-end dividend payouts, with stocks of some companies showing a rise in trading volume even when the rest of the market is seeing a downward trend.
Phu Thinh-Nha Be Garment Joint Stock Co (NPS) has topped the list at the Hanoi Trading Securities Centre (HASTC) by announcing it would pay a 40 percent dividend. Each share, there-fore, will receive 4,000 VND. Since the announcement, NPS shares have climbed for eight consecutive trading sessions, rising from 17,000 to close at 21,600 VND per share on Nov.28.
Quang Nam Mineral Industry Co (MIC) has announced a 17 percent dividend and seen share prices rise for the last 10 trading sessions, ending the day at 74,800 VND per share.
Dong Nai Plastics Joint Stock Co (DNP) shares have climbed for four consecutive trading sessions, with buy orders massively outnumbering sell orders. DNP closed at 12,100 VND per share on Nov.28.
Minh Quan, an investor with Rong Viet Securities, said that dividend payments would help him recover some capital lost die to falling stock prices. He said investors were also looking to the prospect of listed companies with strong business performance, buying back shares after dividend payment season.
Hoang Thach Lam of SME Securities Co noted that a number of firms were diverting earings into dividend payments before the end of this year rather than reinvest in production or business expansion. The move was timed to help investor enjoy tax-free income before changes in the tax law on January 1 subject dividend payments to taxation.
But the Vietnam Association of Financial Investors (VAFI) has warned businesses that they should not race to pay high dividend payments but recommended that they reinvest in their own growth and operations.
VNA
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