Sunday, June 22, 2008


Does the NSE or CMA have a policy on payment of dividends especially around:

  • within what period dividends should be paid?
  • how they should be paid i.e. in this day and age they should be done via EFT?
  • escalation steps when they don't get paid by the company
  • when they don't get paid by the broker into the investor's account
  • do they ever enforce it?

The answer is no.

Lakini, looking at the way firms are dealing with dividends and given that the NSE is a fairly ineffecient market anyway (i.e. in most developed markets, dividend p;olicy does impact share price perfomance over the long-term as opposed to the NSE where investors may trade speculatively to pick up divs before taking off), the NSEshould now come up with clear policy around the issues above. Otherwise we have a situation where KRe announced a div on 29th of April appaertaining to 2007 that will be paid in September!


bankelele said...

This is a sore point for many investors. (Delays) dividend cycles of 6 months, for no apparent reason.

John Maina said...

Two things that will overhaul how nse/cma do their things;

1. the demutualization which will bring more accountability

2. the emerging stock agents who are quite many but dependent on the stockbrokers being authorised to become brokers. Many are doing a great job which hopefully continue when registered.

On the issue of dividend delays me think its to do with the African way of doing things i.e. no hurry in Africa. it happened with the safcom refunds meaning no lessons learnt or clear policy's from past delays.

MainaT said...

JM-stock agents support brokers and are part of the problem.
Competitition from banks will be the big-game changer