Vietnam - Some enterprises paying high dividend despite cash scarcity

Despite the difficult economy and smaller business capital source, some enterprises still announced to pay high dividends compared with previous periods, a local newswire reported.

In the recent past, the stock market continuously went down along with a slowdown in paying share dividend. This meant that receiving cash dividend was preferred.

Last year ABT (An Binh Seafood Joint Stock Co) paid 2011 dividend at 45% on par, GIL fulfilled the dividend payment of 40%, SDG and AAM advanced 30%, NTL and ACL paid 25%, BHS advanced the first phase dividend of 20% against full year dividend of 35%.

In 2012 early, the number of firms announcing to pay high cash dividend for 2011 kept rising. Notably, ABT lately agreed to pay the dividend of extra 15%, lifting total dividend of 2011 to 60% in cash.

ACL also raised the dividend plan of 2011 by 20% to 45%.

Meanwhile, HDC in the real estate sector also planned to pay a dividend of 30% including 20% in cash and 10% in shares.

Although the liquidity of banking sector is undergoing the tense period, Asia Commercial Bank (ACB) still decided to advance 2011 dividend for first round at 20%, meaning that the bank will spend over 1.875 billion dong to pay its shareholders.

In addition, others like DXP closed the right to receive the 30% cash dividend, TAG 20%, CNG seeking shareholder’s approval to pay 2011 dividend of 40% in cash and JVC revised up the dividend plan to 30%.

Such high dividend plans came from demand of majority shareholders who need cash to ensure their operation; low business growth for which firms use a small profit ratio to reinvest and remainder used to pay dividend; CIT exemption (effective from August 1, 2011 to December 31, 2012) on dividends shared to securities investment individuals, and shareholder strategy of enterprises in such a difficult context.

VietBiz24

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