Quoted companies must maintain steady dividends –Analysts

Capital market analysts have called on the managements of companies listed on the Nigerian Stock Exchange to improve the value of dividends they give to investors.

According to the analysts, the situation in which companies declare lower dividends than what they declared in the previous years is unhealthy for the Exchange.

They said apart from the fact that new investments would not be attracted, the practice could also discourage investors.

Some quoted firms on the Exchange have been holding their Annual General Meetings since the year began and some of them have declared dividends.

However, findings by our correspondent revealed that only a handful of the companies declared dividends above N1 per share to the shareholders for their 2010 financial year.

Analysts, who spoke with our correspondent on the development, said it was high time the companies assisted in deepening the market, noting that the declaration of dividends and bonuses for the shareholders impacted positively on the Exchange.

The General Manager and Chief Operating Officer, Heartbeat Investment Limited, Mr. Henry Izegaegbe, said if companies failed to improve on what they declared as dividends yearly, it would be difficult for capital market operators to trade on their equities.

“Do you expect a broker to advise investors to buy the shares of a company that does not declare good dividend?” he asked.

Izegaegbe noted that investors were usually monitoring declarations made by listed firms and explained that if a company’s stock was not tradable, its share price would fall. The larger effect, he said, would be felt by the stock market and the nation’s economy.

He said, “This of course does not tell well of the company, for it means such a company does not have a bright prospect. The stock exchange is also affected, so it is advisable that companies maintain a dividend policy of not less than N1, which their investors will be satisfied with.

“Declaring dividends in kobos is not always welcomed by most investors. Companies should strive to improve on what they declare yearly.”

The Managing Partner, Suredge Investment Limited, Mr. Augustine Egberi, had earlier told our correspondent that the payment of “good dividends” to investors did not only make the recipients happy with the firms, but would lead to the presence of more investors in the capital market.

“Investors appreciate it when they make much as dividends from their companies and more people are attracted to invest in the stock market when companies perform creditably in terms of declaring bonuses and dividends,” he said.