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

Click Link to get instant AI answers to all business queries.
Click Link to find latest Economic Outlook of Sri Lanka
Click Link to view latest Research and Analysis of the key Sectors and Industries of Sri Lanka
Worried about Paying Taxes? Click Link to find answers to all your Tax related matters
Do you have a legal issues? Find instant answers to all Sri Lanka Legal queries. Click Link
Latest images

Latest topics

» EXPO.N - Expo Lanka Holdings De-Listing
by glad Today at 9:27 am

» Sri Lanka: Stock Market Fraudsters with Criminal Prosecutions
by D.G.Dayaratne Yesterday at 7:28 am

» hSenid Business Solutions(HBS)
by K.R Fri May 17, 2024 9:08 am

» CBSL Pension Fund vs EPF
by God Father Thu May 16, 2024 9:13 am

» Nations Trust Bank: Consistent growth
by ErangaDS Wed May 15, 2024 8:46 am

» SOFTLOGIC LIFE INSURANCE PLC (AAIC.N0000)
by soileconomy Wed May 15, 2024 4:01 am

» Falsified accounts and financial misrepresentation at Arpico Insurance PLC (AINS)
by DeepFreakingValue Tue May 14, 2024 12:20 am

» Potential Super Gain with HSIG
by Investment 1st Mon May 13, 2024 12:20 am

» ජනාධිපතිවරණය - 2024
by ChooBoy Sat May 11, 2024 11:20 pm

» The IMF's Monumental Malpractices and future of Sri Lanka
by ChooBoy Sat May 11, 2024 11:18 pm

» Sri Lanka: Policy Challenge Addressing Poverty Vulnerability as the Economy Recovers
by ResearchMan Fri May 10, 2024 12:20 pm

» SINS - the Tailwind effects of a crisis hit Economy
by Equity Win Thu May 09, 2024 7:37 pm

» TAFL is the most undervalued & highly potential counter in the Poultry Sector
by atdeane Thu May 09, 2024 7:09 pm

» Sri Lanka: Country Information Report
by God Father Thu May 09, 2024 5:22 pm

» Sri Lanka polls could risk economic recovery
by God Father Thu May 09, 2024 5:12 pm

» AGSTAR PLC (AGST.N0000)
by ResearchMan Thu May 09, 2024 12:21 pm

» Browns becomes world’s biggest tea exporter in deal with LIPTON
by sureshot Wed May 08, 2024 9:51 pm

» Colombo Stock Market: Over Valued against USD!
by ResearchMan Wed May 08, 2024 12:49 pm

» COCR IN TROUBLE?
by D.G.Dayaratne Mon May 06, 2024 9:31 am

» Maharaja advise - April 2024
by celtic tiger Tue Apr 30, 2024 12:01 am

» Srilanka's Access Engineering PLC think and Win
by Dasun Maduwantha Mon Apr 29, 2024 11:40 pm

» PEOPLE'S INSURANCE PLC (PINS.N0000)
by ErangaDS Fri Apr 26, 2024 10:24 am

» UNION ASSURANCE PLC (UAL.N0000)
by ErangaDS Fri Apr 26, 2024 10:22 am

» ‘Port City Colombo makes progress in attracting key investments’
by samaritan Thu Apr 25, 2024 9:26 am

» Mahaweli Reach Hotels (MRH.N)
by SL-INVESTOR Wed Apr 24, 2024 11:25 pm

LISTED COMPANIES

Submit Post
ශ්‍රී ලංකා මූල්‍ය වංශකථාව - සිංහල
Submit Post


CONATCT US


Send your suggestions and comments

* - required fields

Read FINANCIAL CHRONICLE™ Disclaimer



EXPERT CHRONICLE™

ECONOMIC CHRONICLE

GROSS DOMESTIC PRODUCT (GDP)



CHRONICLE™ YouTube


You are not connected. Please login or register

What should a responsible Company Directorate do in this free falling market?

+4
K.Haputantri
Antonym
malanp
lokka1
8 posters

Go down  Message [Page 1 of 1]

lokka1


Manager - Equity Analytics
Manager - Equity Analytics

The stock market has been free falling over the last several months. Most of the small investors have lost over 50% of their portfolios due to force selling and steep downward movement of market prices. In this climate of a free falling stock market there are several things a responsible company directorate can do to arrest the free fall of the share price and enhance the net asset value of the share. One of the first thing they can do is to declare a buy back program of the company shares either as treasury stock or for the portfolios of the directors. If they buy at least 5% of the free floating shares at a price higher than the prevailing market prices over several months it will immediately arrest the free fall. This is what JKH did over several years ago and is a good example to follow. A program like that will prevent the seller from selling and will give an incentive to the buyer to buy!.
The second thing that could be done is to declare a dividend. There are many insurance companies and big banks that declared big profits but did very little to help the share holders to stay in the markets. They only rewarded themselves to big fat bonuses. There is nothing wrong in giving a fair and just bonus if one has helped the bottom line and enhanced the share holder value. Lot of investors are pulling out whatever money they can get from the stock market and have invested in fixed deposits at the finance companies and banks. A dividend would reduce this depletion of market capital to a large extent. In this instance the Government also can help by declaring a temporary freeze to the taxes withheld from the dividends. The companies have already paid taxes on the profits earned and it is not fair to tax the individual share holder again. The stock market dividends are supposed to be tax free. However, no body bothers to file tax return to reclaim these taxes that are withheld from the dividends.
If collectively the Companies, The Government and the SEC do not do some thing we will not be the "wonder of Asia" but the laughing stock market in the world. It seems to me that collectively they are all sleeping at the wheel and hurling aimlessly unaware of the dangers ahead. I pray that they all wake up soon and do something constructive to help the market. Lokka1

malanp


Senior Manager - Equity Analytics
Senior Manager - Equity Analytics


yes this is true.. directors of falling companies should do either buying shares or declaring dividends to help investors.

Antonym

Antonym
Vice President - Equity Analytics
Vice President - Equity Analytics

@lokka1: Interesting ideas...
On average, SL companies pay out only 27.84% of their earnings as dividends; it would be nice if this can be increased to about 50%.
If a company believes that its shares are significantly undervalued, directors can decide on a share buyback (for cancellation or reissue at a later date).

Definition of 'Share Repurchase'
A program by which a company buys back its own shares from the marketplace, reducing the number of outstanding shares. Share repurchase is usually an indication that the company's management thinks the shares are undervalued. The company can buy shares directly from the market or offer its shareholder the option to tender their shares directly to the company at a fixed price.
(Source: Investopedia)

K.Haputantri

K.Haputantri
Co-Admin

Good proposal. Attention of Boards of Directors need to be drawn to this suggestion. In addition, the SEC should propose to the Govt., to temporarily suspend the 10% tax on dividents untill the market recovers. Otherwise Colombo bourse will die a natural death.

Deva


Senior Manager - Equity Analytics
Senior Manager - Equity Analytics

Problem is to wake-up these guys. They don't seem to be bothered at all.

Antonym

Antonym
Vice President - Equity Analytics
Vice President - Equity Analytics

Deva wrote:Problem is to wake-up these guys. They don't seem to be bothered at all.
@Deva: One way to make our voice heard is at the AGM. I think most of us (including me) are guilty of not having done our duty as shareholders.
Question for all members: Which was the last company AGM that you attended? Did you express your opinion?

K.Haputantri

K.Haputantri
Co-Admin

Antonym wrote:
Deva wrote:Problem is to wake-up these guys. They don't seem to be bothered at all.
@Deva: One way to make our voice heard is at the AGM. I think most of us (including me) are guilty of not having done our duty as shareholders.
Question for all members: Which was the last company AGM that you attended? Did you express your opinion?

I have never attended. Feel guilty.

Deva


Senior Manager - Equity Analytics
Senior Manager - Equity Analytics

Antonym wrote:
Deva wrote:Problem is to wake-up these guys. They don't seem to be bothered at all.
@Deva: One way to make our voice heard is at the AGM. I think most of us (including me) are guilty of not having done our duty as shareholders.
Question for all members: Which was the last company AGM that you attended? Did you express your opinion?

Agree with you Antonym. We should collectively voice our concerns.

For me it was CTC in April, which values the shareholders and no big issues.
Next few months will be the interesting period with most of the AGMs, where we should actively participate.

worthiness


Senior Vice President - Equity Analytics
Senior Vice President - Equity Analytics

All related authorities to stock market are jointly & severally responsible for falling market.
It is not the fact that they are not aware of how to stop this free falling. Apparently it is the total negligence & sluggish management style of the regulators in this capital market environment.
Share buy back, attractive dividends & elimination of withholding taxes are basic steps similar to oxygen given for the dying patient. Salvaging the gone conviction of the investors is the herculean task at this juncture.

Dileepa


Senior Manager - Equity Analytics
Senior Manager - Equity Analytics

Why should they buy back? Every body is here to make a profit.
In my opinion buy back in order to prevent a market fall is a stupid idea.
In the past some companies may have done this, but prevention of a market fall is not the motive of this.
Companies buy back their own shares, if their shares have gone down unusually and they see that as a investment opportunity.
Just like investing in a another company,
they buy their own shares with the intention of retaining dividend payment and selling them later with a higher gain.
Money is needed for a company to run and expand the business.
A company should have a damn good reason to go for a buy back and lose the liquid cash.

bullrun

bullrun
Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics

This request is seems to be appropriate. Sometime back when ETF purchased shares several pundits started to express numerous negative marks. Some are still trying to get political gain at each and every point. They do not have any mercy over small scale investors. They must realize that they are killing their own helpers. Because 90% of the market players are rely upon them. Even ETF seems like reluctant to buy may be because new pundits. We can appeal only to sudda which we expelled in 1948. They have started to do it gradually but in small scale. Some are scared about foreign buying assuming that LTTE is there behind it. My feeling is that some people want to destroy the market! As an example, till midnight of August 1977 we paid only Rs. 8.00 to a 1 US $. With the introduction of free market economy with 100% devalue, SLR started to decline. The same people who started to de-value currency by 100% and let the market forces to determine the valve of the LKR now against to it? “Ane kale wane wase!

Sponsored content



Back to top  Message [Page 1 of 1]

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