The 5sen adjustment kinda outdated because share price is not adjusted " manually " up when a company announces a jump in profit nor any increase in NTA. Neither share cprice is manually adjusted with 5sen up when the dividend is declared.

So it should not adjusted manually down. Kinda free market forces.

Just my view.

This post has been edited by SKY 1809: Nov 6 2010, 11:40 PM

hmm....
if not wrong , the adjustments is due to there will be a deduction of lump sum for dividend payment in the accounts.

Do not take it too seriously, I just say something to open up your mind and thought only.

It follows the unit trust method where unit is based on NTA to calculate.

This post has been edited by SKY 1809: Nov 6 2010, 10:04 PM

not taking seriously at all , still wondering

ok just to you you an example

NTA : rm 2

Share price could be at rm 1.4

IF a company makes a profit, and NTA jumps to 2.15, share price might sink to 1.3 before ex ( impact from Dow )

But when a company declares a 5sen div, ex date , share price adjusted down again by 5sen. So could be RM 1.25.

The adjustment does not reflect anything at all

This post has been edited by SKY 1809: Nov 6 2010, 10:26 PM

In either case, the actual yield will be = ("dividend received" LESS "drop in share price")
----------------------------------------------------- x 100% ?
( actual purchase price)


If share price drop the same amount as the dividend received, then there is in essence no immediate gain/profit ?

If so, it seem that buying AmFirst now (before ex-date) to almost immediately received the 5sen dividend may not be a any more profitable than buying after the ex-date and receiving the next round of dividends about 6 months from now.

Market price will be deducted by the 5 sen at ex-date so do the NTA. Normally market price is adjusted by Bursa at ex-date and the NTA will be adjusted when the actual dividends are paid out.

Just give an example that company A had an NTA of 2.0 but traded at 1.5 at 1 Feb. Later it announced to pay dividend of 0.05 each share, ex-date at 1-Mar and payable date at 1-Apr. So when the market closed at 29-Feb, the NTA was still the same at 2.0 but the share price increased to 1.6.

In the morning 8.30 a.m. at 1-Mar before the market started to trade, Bursa adjusts the share price to 1.55 (=1.60 - 0.05) but NTA still the same as 2.0.

Later when day came close to 31-Mar, the NTA and share price did not change since 1-Mar at 2.0 and 1.55 respectively. The actual dividend were then paid out in cheque/e-dividend to shareholders at 1-Apr and thus the NTA will be adjusted to 1.95 (= 2.0 - 0.05) but the share price still remained as 1.55

The thing is why when NTA jumps 15sen in the first place due to better profit , share price is not adjusted up manually at all ?

Yes, that why some investors would think dividend is irrelevant, because paying dividend is kind of transferring from your left pocket to your right pocket.

From example, before the declaration of dividend of RM0.05 each share, you are holding 1,000 units stock A with a market value of RM1 each, so your total investment value in this stock A is RM1,000 (= 1,000 * RM1). After getting the dividend, the market value of the stock A becomes RM0.95 (=RM1 - RM0.05), so you now have a stock value of RM950 (=1,000 * RM0.95) for stock A and RM50 in cash (= 1,000* RM0.05). As a whole, your total wealth still remain the same at RM1,000 (= RM950 + RM50), which now just in a form of stock+cash rather than all in stocks.

And even worse in a case that RM50 cash dividend might not be worth RM50 because people might spend it rather than reinvest it back or keep it in the bank. If you spend the dividend, you only have wealth RM950 now .

How you sure share price does not jump after NTA jumps? Most likely share price already jump 1st before the declaration of NTA jump lah . Since share price already jumped so it will not jump again when NTA is declared to increase otherwise the "jump" is double count loh .

To laymen, you put in 1k FD and let say int is also 5% , so you get 50 interest.

But your FD amt would be adjusted to rm 950. So rm 50 is basically paid out of your own capital. EX date adjustment.

On top of that . rm 50 is also subject to withholding tax or single tie tax.

I mean you get negative return for dividends recd IF share price is adjusted for dividends recd ( diff of cum and ex date )

This post has been edited by SKY 1809: Nov 7 2010, 09:33 AM

how come amfirst reit dividend drop?

WTF !! SUNREIT Interim Income Distribution 1.51 Sen only...
Fxxking less !!!

My advice is don buy newly listed Reits. Can buy Amanah Raya Reits.

Strength :

- 8% yield
- diversified portfolio

These are the two most important criteria for reits investment.



This post has been edited by darkknight81: Nov 10 2010, 07:59 PM

Yeah !! Agree !!
I thought SUNREIT is the most largest asset..
But dividend damn less... Too Giam Siap ad!!

Besides, need to see their loan ratio and interest incurred.

I am new in reits too. Entered ARREIT since last week.

In investment who cares you are the largest company or reits? What we are looking for is return.... Not size.

This post has been edited by darkknight81: Nov 10 2010, 08:15 PM

OIc...I am new too... I enter SUNREIT last month...

Doesn't matter new or old timer lol. As long as you know what you want. In other words you must have your own direction in investment.

This post has been edited by darkknight81: Nov 10 2010, 08:17 PM

Seriouly..I enter this sunreit coz of dividend...
But the dividend low.... I better buy Dialog with 18% dividend !!!!
Haiz...BIG MISTAKES !!!!!
REIT raise like turtle.......

lol are you sure dialog gave 18% dividend? I bet you not.