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The share price only will be affect by the demand from the market.. The reason why you all said dividend will affect share price is because of selling pressure after the ex date, but in other situation, if the the company didn't paid high dividend, will it affect so much to share price?
anime..we are not talking about demand here..what ken.meant was if the price of AA is closed at 2.90 a day before ex date then the next trading day which is the ex date the share price will be adjusted to 2.00..
anime, please get your facts right. whatever dividend declared by any company, the share price will be deducted accordingly on the EX date itself using
(Last Closing Price - Dividend declared) = EX date Opening Price
sorry newbie here. if on ex date the share price will be adjusted to rm2.90 to rm2.00 for example, why people still buy in the share before ex date? (which i thought ppl buy for the dividen). Why not buy after ex date?
ho kong ze...you see before the announcement of the .90 dividen..AA is hovering at about 2.10 to 2.40 ..that is where those ppl who bought it at that price will see AA share price upwards till 3.10 around that...so in another word is that you will never know when the good news will come..we buy AA is because the history dividen and good maagement of the company for long term investment..i bought at 2.57 before announcement of the dividen.. on paper i have already gained even after adjustment .
Lol..for me...i buy before the ex date is bcoz i can make sure i get the share with the price 1.9+ (2.9x -0.9)...coz after ex date, im not sure i can get the share with tat price again...since i can 100% confirm a lot of ppl will buy one...the price is too attractive after exdate...*tats my opinion..
thanks Athmest and Khai Chuan for comment. let me put another word, so people buy before ex date (to get the dividend), even though they know it will be adjusted to -90cents. then when ex date chip in again and pray the price will increase more than before ex date share price? (of course this is for long term player)
Khai is right. U will be fighting with many ikan bilis to queue for that price after ex. U think ur hands and legs are fast enough to get that price? Buy now secures u a spot inside. Why later than now? After all if u have intentions to buy in. Those no planning to buy but talk only then DIFFERENT story.
hallo, everybody, anime house is indeed right too. price on or after dividen ex date would not be adjusted, so long as no actual trading of shares happened with lower price offered.
there's nothing a fixed mechanism in determining the price, just pure wills of seller and buyer. of course, practically, seller would lower down price if they want to easily sell off their shares. to make it a bit cheap to potential buyer, its alright what. but, nothing is compulsory here regarding price adjustment.
when i met a company which i liked it very much, i offered higher even up to 10percent its current price so as to get the shares from sellers. on that trading day, its price was totally up lifted by my trading, i was the sole buyer. company's value was up 10million above due to my support the whole day.
but do u think, i did really raise the 'actual' value of company? no i didnt. share price is just a reflection of market's will, just a piece of paper, nothing else.
for example, closing price for tomorrow is 2.9. Then, share price for Monday will become RM 2.
This is because company pay dividend by cash. Cash is an assets. If you learn accounting, (Assets = Owner's Equity + liabilities). all ordinary share record in Owner's equity. Company pay by cash. When cash decrease, means that asset of the company decrease, so the Owners Equity must decrease a same amount like decreasing of assets. That why the share must be adjusted during ex date.
mr cst. yes. u are right too to some extent. it could be lower even though.
but, lets say, if i use your equation to determine the share price, i would see that many companies' share prices are 50-70 percent lower than its total equity, to be even more 'actual' in sense, its nta, why that happened? this is 100 percent based on sense of accounting, but why actual share price could be ended the other way?
