NIFRA (4%) and Citizens (9%) – both cash.
This sub has been divided on cash or bonus share. It seems two of them are giving cash only. Is this good ?
With CD ratio, it seems many are likely to follow same.
View on r/NepalStock by captainright1
What has CD ratio to do with banks giving Cash dividend instead of Bonus shares?
With the current market scenario and some freedom from NRB, it seems many companies will go with a cash dividend until and unless they have some compulsion to increase their paid-up capital.
If the company gives bonus shares, it will further reduce the stock price after adjustment in this bear market. Supply will be high, which will further discourage and deteriorate the mass sentiment which is already beaten by fear.
If the company gives cash, then the price won’t be adjusted. The possibility of maintaining or even increasing EPS in the following quarters and year is high.
Some companies already have decent paid-up capital with reference to market capitalization, such companies should focus on giving cash dividends rather than bonuses otherwise they will suffer especially if a company is not growing at par with its EPS. One such example is NLIC. It used to give very high bonus shares and its growth could not justify the bonus shares they are providing which had hit its EPS at large.
Now as an investor, we need to change our attitude towards bonus shares, right shares and encourage and embrace cash dividends. I am not saying they are bad but companies are unnecessarily using these tools to attract new investors.
If a company is growing and they need capital to scale up its business, then the right share is justified to go after but the current trend of right share (hydropower sector) is pathetic, the company is not capable to yield enough revenue to pay its debt and expenses and basically they are taking money from investors by going through right share route and new investors are running after it and ultimately losing their investment.
So, in my view, it seems we need to change our conventional attitude.
I have 60 shares on NIFRA, how much cash will I get?
Yo barsa cash dividend dida alikati naramro lagcha hola, tara same number of shares ko lagi arko barsa business badhda kheri jhan dherai dividend aaune chance badhcha.
Anyday cash dividend over bonus shares.
I would take any amount of cash dividend than bonus shares….specially for commercial banks….
only 4% or even only 9% cash is very low, can’t be a good thing
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