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Advanced dividend payment makes investors happy
A lot of listed companies have announced high dividend advances for 2009, which has encouraged investors in the context of the stock price falls.
Not only have they increased the previously planned dividends for 2009, a lot of listed companies have decided to pay dividend advances to their shareholders. Vinamilk, for example, has drawn up a list of shareholders who will get dividend advances. They will get 2,000 dong per share, or 20 percent of the stock’s face value, which is really an attractive dividend level.
Since the announcement about the dividend advance, Vinamilk’s shares (VNM) have seen continued price increases despite the price falls of many other stock items.
Other listed companies have also announced dividend advances, which, though not as high as Vinamilk’s, are still satisfactory. For example, Tan Tien Plastics Package Company (TTP) 10 percent (1,000 dong per share), while Saigon Garment Production and Trade Company (GMC) and Seafood Company No 4 (TS4) 6 percent, or 600 dong per share.
Thu An, an investor on BVSC trading floor, said that the dividend advance payment has ‘consoled’ individual investors like her.
“We feel better when we receive dividend advances, though stock prices keep falling. The most important thing is that we know that the companies we have injected money into are making profit,” she said.
Anh Thi, an investor on VCBS HCM City branch, said that the information about the dividend advance payment has helped push stock prices up.
“The dividend payment has been welcomed by investors. They all want ‘fresh’ cash’ right now instead of waiting until the end of the year,” Thi said.
Listed companies told not to live beyond their income
According to securities expert Le Dat Chi, in principle, the profit for paying dividend should be calculated after the fiscal year’s auditing. He said that if companies advance dividends while it is unclear about their business performance in the last six months of the year, there are latent risks.
“What will happen if listed companies lose money in the last six months of the year? How will the advance be settled?” he questioned, saying that companies have to fulfill duties they promise to creditors and clients before paying dividends to shareholders.
Meanwhile, listed companies say that they pay dividends in many phrases in accordance with the spirit of the shareholders’ meeting resolution.
Le Quang Hung, Chairman of GMC, said that the 6 percent dividend advance is equal to 50 percent of the dividend planned for 2009.
Hung said that the company has well prepared for the production and business plan for the second half; therefore, he does foresee any problem.
He went on to say that every business needs to consider their conditions to define reasonable dividends and avoid risks which may affect their operations.
However, Chi still has asked government management agencies to keep strict supervision over the dividend advance payment of listed companies. Chi has stressed that the supervision will help minimise latent risks that some listed companies, which trying to please shareholders, may ignore.
vietnamnet, dtck
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