Q2 earnings, high dividend will attract investors

Monday, Apr 23, 2018 11:34

Shares of many companies have surged after their announcement of high dividend payment. — Photo kiplinger.com

Listed companies with positive second-quarter earning prospects, as well as high dividend payment, are likely to attract investors in the future, after the effect of the Q1 result has cooled.

In the latter half of April, over 20 companies will finalise the lists of shareholders for cash dividend payout at the rate of 5 per cent to 35 per cent. Many companies have seen their share prices soar in recent sessions.

Vnsteel – Vicasa Joint Stock Company, which trades shares on the Unlisted Public Company Market (UPCoM) under the code VCA, will pay cash dividend at a rate of 30 per cent on May 15.

After the dividend announcement, the shares climbed over 20 per cent from VND16,400 per share on April 11 to VND20,000 (US$0.88) per share on April 16 before falling to nearly VND19,000 by the end of last week. The steel shares were also among the most active stocks on the market thanks to a surge in demand.

The increase of cash dividend to 24 per cent, a half rise compared to the old rate of 16 per cent, also helped boost shares of Tuong An Vegetable Oil Joint Stock Company (TAC). Its 2017 net profit result was also good at VND166 billion, up 98 per cent against last year.

TAC price rose 12 per cent in one week, from VND53,500 per share on April 12 to VND59,800 each on April 20.

Earlier, shares of Ben Tre Aquaproduct Import and Export Joint Stock Company (ABT) also increased from VND36,000 per share in early April to VND38,500 on April 16 before falling to around VND37,000, after the company reported good business results and a dividend rate of 30 per cent for 2017.

Q2 earnings under radar

According to statistics from the two main stock exchanges in HCM City and Ha Noi, listed businesses on these two exchanges have enjoyed profit growth in the six consecutive quarters ending December 2017.

Growth expanded across almost all sectors thanks to favourable macroeconomic conditions, low lending rates, as well as rising consumer demand.

Such encouraging results have already reflected in their share price increases from last year. The sectors with the highest investment returns included financial services, real estate and banking.

As the effect of Q1 earnings has faded, many analysts have predicted that Q2 prospects will have a stronger impact on share prices in the coming time, especially in the latter half of the second quarter.

According to Bao Viet Securities Company (BVSC), promising sectors in the medium term include banking, real estate, information technology and thermal power. Many of these businesses reported good results in the first quarter.

However, BVSC’s analysts have also warned that positive earnings impact may be modest, and risk is rising as many shares in these sectors have seen a prolonged rally. – VNS

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