Seeking out a double windfall

Tag : Garden Machinery Parts

With the Thai stock market having fallen over 20 per cent since its52-week-high close on October 25, many analysts forecast that thedownside risk is limited.
Besides, announcement of listed companies' second-quarter earningsis around the corner, and it is normal for interim dividendspeculation to occur this month and next, so it is time forinvestors to snap up certain stocks for a double windfall fromcapital gains and dividends.
Regardless of capital gains, 1 per cent of dividend from holding astock for one month is equivalent to 12 per cent per annum, farabove the average inflation rate, estimated at 7-8 per cent thisyear. Investors can enjoy this handsome return on investment ifthey snap up a stock in July and hold it until it is posted "XD"(excluding dividend) for an interim dividend normally in August orSeptember.
Asia Plus Securities' research report "A Chance to AccumulateDividend Stock" found 22 securities that have a potential interimdividend yield of over 6 per cent per year and a potential upsidegain of over 10 per cent from closing prices on July 10.
Navanakorn was expected to offer the highest dividend yield amongthe 22 stocks at 6.33 per cent for the interim dividend. The XDsign for the semi-annual dividend payment typically is posted inSeptember. The industrial-estate developer also had a125.32-per-cent potential upside gain from a fair value estimatedby the broker at Bt3.56.
The broker forecast that Navakorn would pay another Bt0.05 dividendper share for its second-half operation.
Supalai was ranked as the expected second highest interim-dividendyield stock at 5.56 per cent; its XD sign is posted in September.The broker estimated that the property developer would have a 67.36upside gain from fair value of Bt4.82.
The property-developer will pay another dividend of Bt0.17 pershare for the operation period between July and December.
Precious Shipping (PSL) was estimated to pay a quarterly dividendof Bt0.87 per share, representing a 4.53-per-cent dividend yield.Its XD sign is normally posted in August.
The broker said it was under its fair value of Bt27.32 by 27.66 percent.
The shipping company will pay an additional dividend of Bt0.64 pershare for its second half.
With its XD sign posted in August, MCS Steel will pay an interimdividend of Bt0.15 per share, accounting for 4.29 per cent individend yield.
The steel firm's fair value for 2008 stands at Bt4.25, a21.43-per-cent upside gain from the closing price on July 10.
Another Bt0.20-per-share dividend for the second half is expected.
Kiatnakin Bank (KK) is expected to be on par with MCS in terms ofdividend yield at 4.29 per cent from an interim dividend paymentforecast at Bt1 per share. The stock will post its XD sign inAugust. KK had a 68.31-per-cent upside gain from its 2008 fairvalue of Bt39.31.
The small bank will pay a higher dividend of Bt1.30 per share forits last-six-months operation.
SNC Former will pay an interim dividend of Bt0.30 per share for itsfirst-half operation, accounting for a 4.23-per-cent dividendyield; it posts its XD sign next month.
The stock had a 68.45-per-cent upside gain from fair value ofBt11.96.
The leading manufacturer of air-conditioning parts for automobilesand houses is expected by Asia Plus Securities to pay an additionaldividend of Bt0.25 per share for its second-half performance.
Samui Airport Property Fund and Cal-Comp Electronics (Thailand)(CCET) will offer the same dividend yield of 4.05 per cent. Theirstocks will post XD signs in August.
However, the potential upside gain of the former at 37.14 per centis greater than that of CCET at 23.08 per cent.
The property fund will pay another dividend of Bt0.46 per share forthe second half while CCET will pay an additional dividend ofBt0.20 per share.
Advanced Info Service, Thailand's largest mobile-phoneservice-provider, is expected to pay an interim dividend of Bt3.25per share, representing a 3.67-per-cent dividend yield for itsfirst half.
The stock at the market close on July 10 had a 25.14 potentialupside gain from fair value of Bt110.75.
The cash-cow firm is expected to pay a dividend of Bt3.67 per sharefor its second half.
Thai Union Frozen Products will pay an interim dividend of Bt0.55per share, or 3.29-per-cent dividend yield, for the first half andoffer an almost 30-per-cent upside gain from fair value of Bt20.54.
The canned-seafood manufacturer and exporter is expected to pay anadditional dividend of Bt0.56 per share for its July-Decemberoperation.
Thai Oil will pay an interim dividend of Bt1.75 per share,representing a 3.24-per-cent dividend yield, for its firstsix-months operation. Thailand's leading oil-refiner is expected topay another dividend of Bt2.75 per share for the second half.
The stock had a 50.93-per-cent upside gain from the fair value ofBt81.50.
Asia Plus Securities said in the same paper that another 17 stocksbased on the closing prices on July 10 were expected to offerdividend yields that would beat the 7-per-cent inflation.
Thai Metal Trade will offer an annualised dividend yield of 12.8per cent for its 2008 operation, followed closely by Esso(Thailand) at 12.27 per cent and SC Asset Corp at 11.88 per cent.
Property Perfect's annualised dividend yield will be 11.88 per centfor the 2008 operation, with Major Development at 9.57 per cent,Tisco Securities at 9.47 per cent, Vanachai Group at 8.56 per cent,MK Real Estate at 8.21 per cent, KGI Securities (Thailand) at 8.13per cent and Noble Development at 8 per cent.
Baan Rock Garden, Ticon Industrial Connection, Delta Electronics(Thailand), Capital Nomura Securities, Sahamit Machinery, SiamSteel International and GPFT are expected to give an annualiseddividend yield of around 7 per cent.
KGI Securities (Thailand) said CCET, Thai Oil and Advanced InfoService were three stocks likely to see "interim dividendspeculation" and investors could trade on them.
"We are sticking with our interim dividend theme," the broker said.
"We did a study on dividend stocks and found that CCET, Thai Oiland Advanced Info performed abnormally well in July, which is themonth that speculation for mid-year dividends occurs."