Maybank announced a final dividend of RM0.44 per share for FYJune2010. The entitlement date for this dividend was on November 22, which has since passed. Maybank has offered to its shareholder the option of accepting the dividend in the form of cash or to reinvest a portion of the dividend in new Maybank shares (for more, go here & here). The Maybank shares that would be offered for the re-investment of the dividend would be priced at RM7.70- a discount of RM1.00 or 11.5% to the closing price of Maybank on November 26. So, a shareholder with 1000 Maybank shares on November 21 would be entitled to receive a gross dividend of RM440 (or a net dividend of RM330 after deducting tax of 25%). If you opt for the Dividend Re-investment Option, the company will deduct RM292.60 from the net dividend entitlement to purchase 38 new Maybank shares. The balance of RM37.40 will be paid to you in the form of cash.
Since the new Maybank shares to be acquired is at a substantial discount to the market price, it is a better option than receiving cash dividend. To do so, you need to complete & execute the Dividend Re-investment Form (here). The dateline is December 8. If you choose to accept cash, then you need not do anything.
The only downside to re-investing your dividend in new Maybank shares is that you would end up with odd lot. Since the number of shareholders with odd lot would increase sharply after this exercise, I believe the pricing for odd lots would improve (or the discount to Board lots would be smaller). This is because of greater liquidity & the opportunity for arbitraging between Board lots & Odd lots, which would narrow the difference between the prices in these 2 markets.
Based on the above, I would recommend Maybank shareholders to accept the dividend re-investment.
How do you think BPuri http://bernama.com/bernama/v5/newsbusiness.php?id=546291
ReplyDeleteis only Maybank having this kind of dividend reinvestment or all companies listed can do the same.?
ReplyDeleteHi Alex,
ReplyDeleteBase on your multi decade in share market. Can you comment that current global economic condition whether or not much vibrant and brink compare with previous?
I am afraid someone who stand too close is not subject and cloud our vision. Kindly comment !
Thanks
Maybank was a premier stock before venturing into purchasing indon and pakistani banks which eventually turned out to set aside heavy untold looses . I wonder why many opposing voices were sounded but yet the management didn't budge to recind the buying? Many stories untold. People tend to forget the past when even a sigle good story surfaces again. It turns out many were believing that the management has learnt their lessons well but sadly it is not the case. Firstly I m still not convinced of their undertakings no-matter what.
ReplyDeletebro, just wonder will it good for the maybank price? foreseem the mbb price will further down; and yet, that is a indirectly lost for mbb-cw holder..
ReplyDeletepls correct me if i m wrong. thx .
Kseng suspended pending bonus announcement....let see what they have to offer.
ReplyDeleteHi Cheer,
ReplyDeleteBpuri does look very promising. However it needs to break above the RM1.50 horizontal resistance. If it can do so, it may go to RM1.90-2.00.
Hi Wedding Gifts,
ReplyDeleteI can't recall any other company proposing a dividend re-investment option for its dividend payout. Maybank could well be the first company to do so.
Hi Bluesky
ReplyDeleteThe question that you have raised- the current global economic condition- cannot be easily answered. I believe what you are looking for is the outlook of the stock market in the uncertain economic environment, both globally & locally.
There are two positive factors driving up the prices of stocks in the emerging Asian economies. The first factor is good economic growth and secondly the steady inflow of foreign funds. Notwithstanding these powerful forces, the market would take a break from time to time. In 1993, our market corrected back very sharp after a furious bull run even though the economy was still in good shape. Recently, I heard so many talks about a new bull run to come, I became very worried. I warned the readers not to get carried away in the euphoria ( here ).
While the news is generally positive on the local front, globally the news is mixed. Some developed economies are still struggling to achieve sustainable growth without the aid from easy monetary or fiscal policies. Even when accommodative policies are needed, the popular support is waning. Through timid action or inaction, some economies may slip back into recession again. Finally, surprise jump in inflation rate is a new worry that must be dealt with. Should the central bank raise interest rates in the face of sputtering economic growth & high unemployment?
Based on technical analysis, I believe that our stock market is overdue for a correction. How deep or long this correction will be is anybody’s guess. I think that we must be very cautious in the current environment and avoid the tempting to trade the swing.
Good luck!
Hi ayseng
ReplyDeleteThanks for sharing. However, this post is intended for Maybank's shareholders- those who bought into the stock because they like the bank- who have to decide on what to do with the option available for the FY2010 dividend. For those in this position, my recommendation is to accept the offer to invest the dividend in new Maybank shares at RM7.70 each.
Hi Ivan
ReplyDeleteYou raised 2 questions:
1) Would this impact the share price? The answer is likely to be 'NO'. The entitlement date for the dividend has passed on Nov 22. If all the shareholders opt to re-invest the dividend in new shares, Maybank's issued share capital may increase by 3.9% or by 274 million shares. The additional shares may cause a small dent in the share price for a few days, but it should be very minimal.
2) Impact on Maybank's CWs is definitely negative. However, since the entitlement date has passed, I believe the adjustment has already filtered through the share price.
hi alex,
ReplyDeletebase on your opinion..how do you rate perisai stock..since i had bought her at 0.595..it moved around .50-.52 recently.
many thanks from me
hi bro Alex. please comment on KPSCB, 3Q EPS already 8.21sen. share price now only 26sen. can buy ?? thx alots.
ReplyDeleteHi Alex,
ReplyDeleteHow u see GENM moving 4ward ? GENM has reached to bottom?
hi Alex,
ReplyDeletei just bought KNM share last week 4000unit@RM0.45
today they announce that:
Share consolidation involving the consolidation of every 4 existing ordinary shares of RM0.25 each in KNM Group Berhad ("KNM") into 1 ordinary share of RM1.00 each in KNM ("Consolidated Share").
my questions are:
1)is my shares include in this consolidation?
2)what should i do hold or sell
thanks
Hi Alex,
ReplyDeleteMany thanks for given your view of my question yesterday about Global economic condition.
Very kind regards,
Hi Alex,
ReplyDeleteNeed your comment on DXN (5074), Zhulian (5131) & Haio (7668)
Fr Aug'10 to Nov'10
DXN - Up 60.26% fr 0.78 to 1.25
Zhulian - Down 11.28% fr 1.95 to 1.73
Haio - Down 15.82% fr 3.54 to 2.98
Thanks
Hi kayz
ReplyDeleteThe call on what to do with KNM now is not straightforward. When it plunged to RM0.40-0.42, I told my clients not to sell. I did not recommend a BUY. To sell then would be like buying a rising stock just because there is a bonus issue or share split.
KNM has rebounded & yesterday it tested its downtrend line which stretched back to June 2009. The resistance for that downtrend line was at RM0.55-0.57. Now the tough part- to sell & avoid a pullback or to rough it out. In view of the present uncertain market outlook- have we made a top?- you may choose to sell on another re-test on the RM0.55 level. If you feel bullish about the market & KNM, you may choose to stay with the stock.
Hi cheer
ReplyDeleteGENM may test its support at RM3.00-3.05. If you study the results of GenM & Genting SP, you could feel the exciting performance of Genting SP vis-a-vis GenM. This excitement has certainly rubbed off in the share price. However if you look at the PE of the 2 companies, GenM's PE is much lower at 15 times (not adjusted for huge cash holding) while Genting SP is at 100 times (go here ).
To answer your question, GenM is an attractive stock in term of valuation. It should find good support at RM3.00-3.05. Since it did not go up a lot, it should be relatively safe (when compared to Genting SP).
NB. Genting SP may see a negative cross-under soon if the stock slid below S$1.90. The cross-under would be given by the 20-day SMA line & the 50-day SMA line.
Hi wong
ReplyDeleteYou could be right on KPSCB. With 3Q EPS at 8.21sen and share price at 26sen, KPSCB is trading at a PE of 2.6 times. Its financial position is quite satisfactory, with current ratio at 2 times & debts to equity at 0.3 time as at 30/9/2010.
Chartwise, it is in a medium-term uptrend line with support at RM0.22-0.23. Its strong horizontal resistance is at RM0.27-0.28.
BUY some...
Hi kiwi
ReplyDeletePerisai has strong support at RM0.50. For QE30/9/2010, Perisai incurred a pre-tax loss of RM8.53 million as compared to a profit before taxation of RM5.79 million for QE30/6/2010.
The loss in the current quarter was mainly due to the write off of the development cost, allowance for doubtful debt, provision for foreseeable loss and the impairment of goodwill as mentioned above, which otherwise the Group would have achieved a profit before tax from continuing operations of RM7.91 million.
Perisai's financial position is not healthy. As at 30/9/2010, its current ratio stood at 0.6 time while debt to equity stood at 0.9 time.
Can Perisai hold onto the RM0.50 support? Let's wait & see.
Bro,
ReplyDeletethx for spend time to reply my msg..wonder everyday how much time u need to spend on reply u blogger /fans question.. i am 1 of u fans too..
Hi Ivan
ReplyDeleteThank you. You've made my day!
Good day Bro Alex,
ReplyDeleteI just re-read again your post.
correct me if I am wrong , with the additional creation of MBB shares, thus who subsribes at RM7.70 ; logically can sell anything above RM7.70 ; eg RM 8.40 and make a capital gain.
Thus, it seem like MBB shares will fall after the additional listed shares, right?
May I have your comment base on technique analsysis on MBB share please? 10s
Hi Ivan,
ReplyDeleteTo your question that MBB shares may fall after the additional listed shares, the answer is "yes". That's what we are seeing now. I also believe that the bulk of the price adjustment is priced in. The downside is limited.
On the technical outlook, I think Maybank will likely to move sideway with a slight downward bias. The reason is that the MACD indicator has crossed downward. The same is also seen for the FBM-KLCI and as such, we may see some correction & sideway movement in the broad market for the next few days. Unless the drop is significant, the selective rotational play will not be hampered.
thanks bro Alex...
ReplyDeletewondering how come foregin mkt mostly on uptrend basic; but klci seem suffer some correction in last friday and monday- big guy move out from bursa?