A-share market sees less 'zero dividend stocks':SSE

minutes 2018/07/26 09:25:13
A-share, zero dividend stocks, SSE

Jul 26, 2018 (China Knowledge) - The Shanghai Stock Exchange said on July 24 that the number of 'zero dividend stocks' in A-share market is declining, according to 2017 annual reports of multiple companies.

Data shows that among the 40 companies that are supposed to pay dividend during the 2014-2016 yet didn't pay, 16 have already launched dividend schemes for 2017, with an average dividend payout ratio of 40% while the remaining zero dividend stocks have also disclosed specific reasons in details mainly because of poor business performance, tight cash flow or large funding demand for business development. From 2013 to 2017, the number of "zero dividend stocks" (referred to listed companies with cash dividends but pay no dividend for three consecutive years) in SSE were 4, 5, 9, 5 and 2.

According to preliminary statistics, 23 companies in the Shanghai Stock Exchange have completed active share repurchase program with aggregate value of repurchase around RMB 5.158 billion since 2017. Among them, 12 companies have completed the share repurchase program, with shares value of repurchase approximately RMB 1.151 billion.

As of June 2018, there were 10 companies that completed the share repurchase program, accounting for about 40% of the total in the past three years. More and more listed companies in China are actively repurchasing shares to return their investors.

A-share companies are often criticized over their low dividend payment or even paying no dividend at all. Regulators and stock exchanges have taken various measures to encourage those companies to pay dividends to their investors, especially retail investors.

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