FINANCIAL CHRONICLE™
Dear Reader,

Registration with the Sri Lanka FINANCIAL CHRONICLE™️ would enable you to enjoy an array of other services such as Member Rankings, User Groups, Own Posts & Profile, Exclusive Research, Live Chat Box etc..

All information contained in this forum is subject to Disclaimer Notice published.


Thank You
FINANCIAL CHRONICLE™️
www.srilankachronicle.com


Join the forum, it's quick and easy

FINANCIAL CHRONICLE™
Dear Reader,

Registration with the Sri Lanka FINANCIAL CHRONICLE™️ would enable you to enjoy an array of other services such as Member Rankings, User Groups, Own Posts & Profile, Exclusive Research, Live Chat Box etc..

All information contained in this forum is subject to Disclaimer Notice published.


Thank You
FINANCIAL CHRONICLE™️
www.srilankachronicle.com
FINANCIAL CHRONICLE™
Would you like to react to this message? Create an account in a few clicks or log in to continue.
FINANCIAL CHRONICLE™

Encyclopedia of Latest news, reviews, discussions and analysis of stock market and investment opportunities in Sri Lanka

LISTED COMPANIES

Submit Post


ADVERTISE
Poll

EXCHANGE RATE PREDICTION: 2022

 
 
 
 

View results

ශ්‍රී ලංකා මූල්‍ය වංශකථාව - සිංහල
Submit Post


CONATCT US


Send your suggestions and comments

* - required fields

Read FINANCIAL CHRONICLE™ Disclaimer



Latest topics

» Expolanka to continue its winning streak
by samaritan Yesterday at 10:22 am

» POSITIVES & TARGETS BY IMTIAZ BUHARDEEN
by Gowri123 Wed Jun 29, 2022 4:38 pm

» When will supply chain disruptions ease?
by Gowri123 Wed Jun 29, 2022 4:08 pm

» We’re seeing a shift toward international and value stocks, says Schwab’s Kleintop
by target1 Wed Jun 29, 2022 2:40 am

» Wall Street stumbles as consumer pessimism stokes growth fears
by target1 Wed Jun 29, 2022 2:34 am

» Free Market Capitalism vs. Crony Capitalism
by target1 Wed Jun 29, 2022 2:30 am

» Sri Lankan corporations reap large profits as workers and rural toilers face poverty and starvation
by CHRONICLE™ Tue Jun 28, 2022 6:37 pm

» අද රාත්‍රියෙන් පසු, යක්ෂයාගේ හෝරාව ඇරඹේ!
by God Father Tue Jun 28, 2022 6:13 pm

» Derana 360 with Minister Dhammika Perera
by samaritan Tue Jun 28, 2022 1:07 pm

» CENTRAL INDUSTRIES PLC (CIND.N0000)
by LHW Tue Jun 28, 2022 9:24 am

» Breaking News- Kanchana to go to Qatar ; 2 more ministers off to Russia
by Beyondsenses Tue Jun 28, 2022 8:13 am

» PM thanks President Biden for assuring US support to Sri Lanka
by Beyondsenses Tue Jun 28, 2022 8:07 am

» Sri Lanka Stock Market heading toward ASPI 4500
by God Father Mon Jun 27, 2022 9:14 pm

» Why no power cuts in certain areas of Colombo?
by God Father Mon Jun 27, 2022 8:03 pm

» කොළඹ රාජකීය ගොල්ෆ් සමාජය විසින් රජයේ දේපළ අවභාවිත කිරීම
by ddindika Mon Jun 27, 2022 9:33 am

» LOLC to enter the giant Indian Market
by samaritan Mon Jun 27, 2022 9:17 am

» LOLC HOLDINGS PLC (LOLC.N0000)
by CHRONICLE™ Mon Jun 27, 2022 6:46 am

» SOEs within Minimum Programme for Economic Recovery
by CHRONICLE™ Mon Jun 27, 2022 6:44 am

» COVID WAVES: Can there be another Covid-19 wave in Sri Lanka?
by CHRONICLE™ Mon Jun 27, 2022 6:36 am

» Luminex Limited lists on the Diri Savi Board after a capital raise of Rs. 250 Million
by CHRONICLE™ Mon Jun 27, 2022 6:34 am

EXPERT CHRONICLE™

MARKET CHAT


CHRONICLE™ ANALYTICS


ECONOMIC CHRONICLE

GROSS DOMESTIC PRODUCT (GDP)


CHRONICLE™ YouTube

LATEST TWEETS

You are not connected. Please login or register

FINANCIAL CHRONICLE™ » CORPORATE CHRONICLE™ » Increasing shareholder value through meaningful acquisitions and investments VS paying dividends

Increasing shareholder value through meaningful acquisitions and investments VS paying dividends

2 posters

Go down  Message [Page 1 of 1]

VALUEPICK

VALUEPICK
Expert
Expert

Which one is better? What are the companies using their cash to create shareholder value through meaningful acquisitions and investments in Sri-Lanka in the following sectors without declaring dividends or declaring fewer dividends than others?

Banking and Finance
Plantations
Production
Food and beverages
Hotel and Travels
Diversify sector

http://www.dividend.com/dividend-education/why-warren-buffett-doesnt-pay-a-dividend/

Why Warren Buffett Doesn’t Pay a Dividend

VALUEPICK

VALUEPICK
Expert
Expert

VALUEPICK

VALUEPICK
Expert
Expert

soileconomy

soileconomy
Vice President - Equity Analytics
Vice President - Equity Analytics

Early 2000's distilarries was leading the through acquisitions which enhanced the shareholder value .sri Lanka insurance ,Lanka bell were taken under dcsl umbrella .madu ,bala goda ,hnb,sampath ,comb,dfcc also routed through dcsl in big parcels.Aitken Spence and many more unlisted companies were taken over by this cash cow. After this move the other shaker was dammika Pereira.his realm was completed with RCL ,lbfin ,samp,conassaice group etc.now young investor ashok pathirage has turned his page through softlogic holdings .Cargills group through ct holdings .
I think divestments are also important if timely done.recently CIC group ,ct holdings , divest some business .these days some congromeretes are in divesting some business.

VALUEPICK

VALUEPICK
Expert
Expert

soileconomy wrote:Early 2000's distilarries was leading the through acquisitions which enhanced the shareholder value .sri Lanka insurance ,Lanka bell were taken under dcsl umbrella .madu ,bala goda ,hnb,sampath ,comb,dfcc also routed through dcsl in big parcels.Aitken Spence and many more unlisted companies were taken over by this cash cow. After this move the other shaker was dammika Pereira.his realm was completed with RCL ,lbfin ,samp,conassaice group etc.now young investor ashok pathirage has turned his page through softlogic holdings .Cargills group through ct holdings .                                                      
I think divestments are also important if timely done.recently CIC group ,ct holdings , divest some business .these days some congromeretes are in divesting some business.

Very informative. Thanks. I can remember some companies divested unproductive areas in the past.

VALUEPICK

VALUEPICK
Expert
Expert

http://www.brw.com.au/p/investing/warren_buffett_five_rules_for_increasing_xAblpjUFBzx9cN74VrFc0O

Warren Buffett’s five rules for increasing shareholder value
Published 02 March 2013 11:49, Updated 04 March 2013 07:15

“Since the basic game is so favourable, Charlie and I believe it’s terrible mistake to try and dance in and out of it based upon the turn of the tarot cards, the predictions of ‘experts’, or the ebb and flow of business activity,” Warren Buffett says in his annual letter to Berkshire Hathaway shareholders.

Warren Buffett has released his annual letter to shareholders following one of the few years in which the book value of the fabled investor’s Berkshire Hathaway hasn’t risen by more than the S&P 500.

“Subpar” is the word the Oracle of Omaha used to sum up the performance, although it should be noted his letter makes him appear somewhat bemused at his own use of the term.
“When the partnership I ran took control of Berkshire in 1965, I could never have dreamed that a year in which we had a gain of $US24.1 billion would be supbar,” he writes.

“But subpar it was. For the ninth time in 48 years, Berkshire’s percentage increase in book value was less than the S&P’s percentage gain (a calculation that includes dividends as well as price appreciation. In eight of those nine years, it should be noted, the S&P had a gain of 15 per cent or more. We do better when the wind is in our face.”

Looking for more elephants

Of course, a bad year for Berkshire Hathaway isn’t your ordinary bad year. The firm still managed a 14 per cent rise in its per share book value versus a 16 per cent percentage gain for the S&P. That hasn’t stopped Buffett from lamenting more than one disappointment last year.

“The second disappointment in 2012 was my inability to make a major acquisition. I pursued a couple of acquisitions but came up empty handed,” he says.

“Our luck, however, changed early this year. In February, we agreed to buy 50 per cent of a holding company that will own all of H.J. Heinz. The other half will be owned by a small group of investors led by Jorge Paulo Lemann, a renowned Brazilian businessman and philanthropist.”

All up Berkshire will plug about $US8 billion into the deal, which he says “soaks up” much of what the firm earned in 2012.

“But we still have plenty of cash and are generating more at a good clip. So it’s back to work; Charlie [Munger, Berkshire vice president] and I have again donned our safari outfits and resumed our search for elephants.”

‘We don’t expect the US economy to tank’

As for the good news, Buffett says Berkshire’s five most profitable non-insurance businesses delivered on his prediction that they would book pretax earnings of more than $US10 billion. The figure, despite weak US growth, came in at $US10.1 billion, up $US600 million on 2011.
“Unless the US economy tanks – which we don’t expect – our powerhouse five should deliver higher earnings in 2013. The five outstanding CEOs who run them will see to that,” the billionaire writes.

As for the insurance businesses, these “shot out the lights”.
“While giving Berkshire $US73 billion of free money to invest, they also deliver a $US1.6 billion underwriting gain, the tenth consecutive year of profitable underwriting. This is truly having your cake and eating it too.”

Buffett also expects Berkshire to increase its stakes in its big four investments, Coca-Cola, American Express, Wells Fargo and IBM in the future.

No need to panic

The investor also maintained his faith in American businesses to do fine in the long run, and says any CEO who has a large, profitable project they’re considering shelving because of short-term worries should give Berkshire a ring.

“Since the basic game is so favourable, Charlie and I believe it’s a terrible mistake to try and dance in and out of it based upon the turn of the tarot cards, the predictions of ‘experts’, or the ebb and flow of business activity,” he says.

“The risks of being out of the game are huge compared to the risks of being in it.”

Guidelines for increasing shareholder value

As Berkshire continues to be a player in the game, Buffett outlined his guidelines for improving shareholder value, by:

•“(1) Improving the earning power of our many subsidiaries;
•“(2) further increasing their earnings through bolt-on acquisitions;
•“(3) participating in the growth of our investees;
•“(4) repurchasing Berkshire shares when they are available at a meaningful discount from intrinsic value; and
•“(5) making an occasional large acquisition.”

He adds: “We will also try to maximise results for you by rarely, if ever, issuing Berkshire shares”.

Why Berkshire doesn’t pay dividends

As for the thorny question of dividends, Buffett tackles the issue with an explanation to shareholders of why he sees greater value for investors in not paying out cash.
Outlining his rationale, Buffett suggests not paying dividends works better both for shareholders and the firm, by allowing individuals the flexibility to extract the right amount of cash for them in the right circumstances, while leaving the business free to invest in itself.

So, he says investors looking to extract money should instead sell shares, leaving the company to pump all earnings back into its operations to increase the net worth of the business over time: what he calls the sell-off alternative.
Buffett runs the numbers for the two approaches on page 19 of the letter,summarising that investors using the sell-off approach have a greater chance of increasing the amount of cash they have to spend each year while gaining capital value.

He continues: “Aside from the favourable math, there are two further – and important – arguments for a sell-off policy. First, dividends impose a specific cash-out policy upon all shareholders. If, say, 40 per cent of earnings is the policy, those who wish 30 per cent or 50 per cent will be thwarted. Our 600,000 shareholders cover the waterfront in their desires for cash. It is safe to say, however, that a great many of them – perhaps most of them – are in net savings mode and logically should prefer no payment at all,” he writes.
“The sell-off alternative, on that other hand, lets each shareholder make his own choice between cash receipts and capital build-up.”
The second important argument against dividends is tax, where all the cash received by shareholders under a dividend policy is taxed, versus the sell-off approach where only a portion is tax.

To that end Berkshire expects to continue its policy of not paying dividends.

“We will stick with this policy as long as we believe our assumptions about the book-value buildup and the market-price premium seem reasonable. If the prospects of either factor change materially for the worse, we will re-examine our actions,” he says.

soileconomy

soileconomy
Vice President - Equity Analytics
Vice President - Equity Analytics

Building a business empire in sri Lanka is hindered by lot of external factors which are purely beyond of businessmen.main reason is as a nation we do not have a national policy.
Very classic example is sri Lanka insurance.after showing almost no growth in profits this was privatized and given to the higest bidder at that time.after this move this company was rapidly developed and its value was increased by nearly five
fold.now what is position of this slic.investor had not been
given the earned profit upto date despite the court decesion. Lanka marine services another one.
At this moment if a leading businessman wants to develop his business empire has to give at least 40% of his wealth to leading politicians.they have to spend their money for the politians son for elections.
Two prominent businessmen were badly beaten .if the same thing happens to dammika and ashok we should not be surprised. This could due the same reason we don't have good long lasting foreign investors in CSE.

Back to top  Message [Page 1 of 1]

Permissions in this forum:
You cannot reply to topics in this forum