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The Illusion About High Dividend Yields in NSE
young
#1 Posted : Sunday, February 26, 2012 12:09:07 AM
Rank: Elder

Joined: 6/20/2007
Posts: 2,075
Location: Lagos, Nigeria
Ladies and Gentlemen,

I see a lot of posts these days ascetaining that a good dividend yield is 10% and above of the current share price.

Be aware that this is an aberration. The standard benchmarch of a good dividend yield is 4% to 6%.

The double digit dividend yield you see is abnormal and peculiar to NSE.

It is caused by depressed share price which is attributable to the bearish mood of the market at the moment traceable to external factors which we all know, one of which is political uncertainties in Kenya.

When the chips are down NSE stocks will be better priced and the dividend yields will drop.
This is however the best time to buy NSE stocks especially end of Q3 /Q4 2012 as you will get good companies at very cheap prices.

Most of them will be double their current value in 2014/15

The wazua spirit as members is to educate and inform and learn from others within the limit of what we know in any chosen area irrespective of our differences in tribes, nationalities, etc. .
guru267
#2 Posted : Sunday, February 26, 2012 8:00:04 AM
Rank: Elder

Joined: 1/21/2010
Posts: 6,675
Location: Nairobi
young wrote:
The double digit dividend yield you see is abnormal and peculiar to NSE.

It is caused by depressed share price which is attributable to the bearish mood of the market at the moment traceable to external factors which we all know, one of which isa political uncertainties in Kenya.


@young to be honest you are starting to sound ilke a short term player..
For a long term investor anytime prices are "depressed" should be the time to be buying like crazy...

Mark 12:29
Deuteronomy 4:16
jerry
#3 Posted : Sunday, February 26, 2012 9:52:54 AM
Rank: Elder

Joined: 9/29/2006
Posts: 2,570
@guru267. @young is just advising the speculators (short-termers!). I think it's always true that 4th-Q is BEST for buying regardless of elections.
The opposite of courage is not cowardice, it's conformity.
young
#4 Posted : Sunday, February 26, 2012 10:11:37 AM
Rank: Elder

Joined: 6/20/2007
Posts: 2,075
Location: Lagos, Nigeria
jerry wrote:
@guru267. @young is just advising the speculators (short-termers!). I think it's always true that 4th-Q is BEST for buying regardless of elections.


I have been in your market since 2004. Quite unlike other bources 95 percent of the counters announce their year end or half year result within the first 3 months of the year (Jan - March). The anticipation of the results naturally drives prices. They start to even our in Q2 and become low and stable from end Q3 / Q4.
A long termer like me is also interested in buying stocks at a good price, so if I have some bob to buy stocks I will wait a few mother later to pick them even cheaper than the prevailing prices.
Agreed the market is depressed, it will be depress further in the months ahead. For example it makes more sence not to buy Eqty now at 19.95 cum 1.00 or 1.25 dividend rather than 16.5 in Sept or oct 2012.
For both long and short term investor it is not good to take position during the euphoria or party time (Jan - March).

If my advise or strategy as a long termner is useful to short term investors, that is very ok by me in the spirit of Wazua.

The point is the abonormal dividend yields 7% and above will not be sustainable on the long term when stocks recover.


The wazua spirit as members is to educate and inform and learn from others within the limit of what we know in any chosen area irrespective of our differences in tribes, nationalities, etc. .
Cde Monomotapa
#5 Posted : Sunday, February 26, 2012 10:39:37 AM
Rank: Chief

Joined: 1/13/2011
Posts: 5,964
Best buy last year was more KCB @14.7 smile cum 1.5=10% cum 1.75=13% on that purchase smile only in KE as @young says. Here pessimism goes beyond extreme.
youcan'tstopusnow
#6 Posted : Sunday, February 26, 2012 1:34:01 PM
Rank: Chief

Joined: 3/24/2010
Posts: 6,779
Location: Black Africa
Cde Monomotapa wrote:
Best buy last year was more KCB @14.7 smile cum 1.5=10% cum 1.75=13% on that purchase smile only in KE as @young says. Here pessimism goes beyond extreme.

KenolKobil at 9 piasmile
And if anyone is a longtermer as they say, the 'high' dividend yields WILL be maintained for them as they will continue holding after buying at a cheap price, ama? I mean, we've heard of guys getting higher dividends (on absolute terms) than the buying price.
GOD BLESS YOUR LIFE
QW25091985
#7 Posted : Sunday, February 26, 2012 4:55:39 PM
Rank: User

Joined: 1/24/2012
Posts: 1,675
Location: In Da Hood
youcan'tstopusnow wrote:
Cde Monomotapa wrote:
Best buy last year was more KCB @14.7 smile cum 1.5=10% cum 1.75=13% on that purchase smile only in KE as @young says. Here pessimism goes beyond extreme.

KenolKobil at 9 piasmile
And if anyone is a longtermer as they say, the 'high' dividend yields WILL be maintained for them as they will continue holding after buying at a cheap price, ama? I mean, we've heard of guys getting higher dividends (on absolute terms) than the buying price.



lol. You guyz make investin look so easy.
youcan'tstopusnow
#8 Posted : Sunday, February 26, 2012 5:48:50 PM
Rank: Chief

Joined: 3/24/2010
Posts: 6,779
Location: Black Africa
QW, you make FOREX trading look easy;-)
GOD BLESS YOUR LIFE
youcan'tstopusnow
#9 Posted : Sunday, February 26, 2012 5:50:25 PM
Rank: Chief

Joined: 3/24/2010
Posts: 6,779
Location: Black Africa
QW, you make FOREX trading look easy;-)
GOD BLESS YOUR LIFE
Aguytrying
#10 Posted : Sunday, February 26, 2012 9:19:09 PM
Rank: Elder

Joined: 7/11/2010
Posts: 5,040
I totally concur with young, its the best of both worlds. Get dividends as you await long term capital gains.
The investor's chief problem - and even his worst enemy - is likely to be himself
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