Last year Reliance Industries provided 90% cash dividend for a share with a book value of Rs 10. The market price in March 2013, when the dividend was declared was Indian Rs. 914.70. Hence, the actual return was 0.98%. It was considered good and nobody was surprised as mostly they were expecting higher capital gain. On October 31, 2013, its share price was 912.35 and people exchanged 387523 shares at BSE, and another 4.5 million unit at NSE at a price of 914.70. In another 4 to 5 months, they are expecting that it will pick up.
We should have long term perspective as investors and trend that creates ups and downs as traders. Treating shares as fixed deposits in the banks and expecting always a high dividend is not what is there in the market. Personally, I prefer capital gain on the long run. Dividend is something extra. An investor running after dividend is strange, but it is a reality in Nepali market.
My priority order as investor is: 1. Credibility of the company and its standing in the industry, 2. Promoters and management
trustworthiness, 3. Regular AGMs, growth history and future prospects, 4. Financial indicators and fundamental as well as technical analysis 5.Annual capital gain/loss/reasons, 5. Price analysis, 6. sale-able, and 7. Dividend/returns.
My priority order as trader is: 1. Credibility of the company and its standing in the industry, 2. Trend – fluctuations in the last 3 to 6 months, 3. Financial indicators and fundamental as well as technical analysis, 4. Share liquidity – volume and retention rate 5. Price - projected buying and selling.
However, two different individuals may not have the same priority, perspective and way of doing business. Hence, I do not claim that whatever I am doing is correct. Moreover, all of us are learning and we may not claim as successful to advise to replicate. We all are learning from trail and error. Hence, let's share our perspectives to help each other.
« Last edit by Rajesh Sharma on Thu Oct 31, 2013 6:41 pm. »
