CDB dividend payment...

UNI wrote:can you explain how will they pay dividend....Im a newcomer to the market..I have 2500 CDB shares...

mark wrote:please remember,when a company declares a dividend share price shoot for a while and coming down gradually......if you are a longterm holder no matter of that,but if you bought these shares to get the dividends,then you may be in a trouble........
after XR normally price go down,but if the price go down more than two rupees,then you will be at a loss....
as examples....
*DFCC-declares a dividend of 7Rs,share price shoot to 180,now the price is 150
*KOTA-declares a dividend of 5Rs,share price shoot to 172,now 150Rs
there is many more examples
so my advise may not relate to this topic,but normally you may get a chance to buy back a particular share at lower levels after sometimes......

just my opinion,consider it also

mark wrote:... after XR normally price go down,but if the price go down more than two rupees,then you will be at a loss...

Academic wrote:

mark wrote:... after XR normally price go down,but if the price go down more than two rupees,then you will be at a loss...

Small correction.

Because of dividend tax, price need not to go down by two rupees. The formula for price change on ex-dividend is

= Dividend x (1-Td)/(1-Tc)

Td is the dividend tax
Tc is the capital gain tax

Since Sri Lanka hasn't capital gain tax. XD price (not XR, the notation XR is used for ex-right not ex-dividend) is expected to go down by Dividend x (1-Td).

mark wrote:

Academic wrote:

mark wrote:... after XR normally price go down,but if the price go down more than two rupees,then you will be at a loss...

Small correction.

Because of dividend tax, price need not to go down by two rupees. The formula for price change on ex-dividend is

= Dividend x (1-Td)/(1-Tc)

Td is the dividend tax
Tc is the capital gain tax

Since Sri Lanka hasn't capital gain tax. XD price (not XR, the notation XR is used for ex-right not ex-dividend) is expected to go down by Dividend x (1-Td).

yup,the actual affect should be 1.80Rs,but normally you couldn't correctly match the price if you going to sell after XD.....btw i was mentioning about normal scenario in CSE..
i had KOTA,my broker told me sell off and to buy back later,but i hold on and got the dividend,but now you can see the price,as i remember price went down more than 5Rs in XR day....

kam2011 wrote:Normaly after dividend no reason to drop of price. ... Under the normal situation dividend payment ... should push the price.

kam2011 wrote: Under the normal situation ... right issue should push the price.

kam2011 wrote:Acadamic, If you have good facts I have to agree with you. But my point is after dividend announcement is made share price is dropped because the decision of dividend payment leaks to the market now before the official annoncement is made and therefore , price will start running to a level more than it should be. Afeter dividend is paid price will drop by that amount or more. All these happened because of the reason that our market is not matured enough and yet to improve every aspects including business ethics.

Regading the Rights Under the normal market condition you can just findout going through our past records,
After PABC Rights announcement in 2010 price went up by around 30-40 %. and price was continued to rise even after exrights. Even Greg in 2010 may after rights annoncement price went up and continued to increase further following the exrights as well.And ABANS in august 2010 after Right annoncement price went up and even after exright it was continued to rise..There are many examples. But may be you have many good facts than me. If right issue is not considerd as an benefit to the shareholders companies can go for new public issue.

• Don't try to generalize past two years of the CSE.
  
• If you think XR prices go up, go and invest in all XRs. It is your money.

kam2011 wrote:acadamic , this is not to argue with you. But to discuss to undestand the market behavior. These days everything happened in the market abnomaly. that is mainly due to lost of investor confidence and many other reasons. It is natural when a merket is dropped like this who is going to invest further. That is my point . That is why xright price is coming down.this is my personal view and different people may have their own view on this matter. We will see other members view if they are interested.

mark wrote: beta value is a thing to look for,but [emphasis added] normally selling pressure in red markets will drag any share down regardless of dividends or rights