young wrote:Cde Monomotapa wrote:Hahaha...I see we got something in common concerning high yielding stocks
i remember after my shopping trip to "Dubai" to buy Scangroup all the way down to 14 bob acieving an of Av.26 bob. After the Ogilvy deal sold off in lots btwn 45-65 as the 70ct dividend became annoying!
Another young old tricks, financially healthy blue chips with Mzungu or foreign holding often return a high dividend as it is one of the legitimate ways they repartriate their funds to the home office . They rather do a rights issue than to pay miserly dividend.
Examples
EABL
BBK
Stanchart
BOC
BAT
BAMB
Not at all.
1) It's not a trick. They make profits. They have the right to a dividend. You own a house/building in Ghana. You earn rent. How you spend the rent is your own business. You can add an addition OR remit it to Nigeria OR invest it in Uganda.
2) All shareholders benefit. Dividends are not reserved for 'majority' shareholders. Many shareholders who bought BBK shares 20 yrs ago get dividends higher than the price they paid for the shares!
3) Kenya has (almost zero) capital controls so I do not understand "one of the legitimate ways they repartriate their funds"... What other method would they use that is not legitimate?
4) All the firms mentioned are 'MATURE' firms that are unlikely to grow their Kenya markets much more so why leave the cash in Kenya when it may produce sub-par returns. Some profitable high growth firms with foreign shareholding & low dividend payout include:
- Safaricom
- Total (expansion by buying Chevron)
- Agricultural Firms (Not high growth but low div payout e.g. Williamson)
- TPS/Serena (Expansion)
- Diamond Trust (EAC expansion)
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett