The following companies will be paying dividends/closing their register this week
Access bank
Access Bank will be paying an interim dividend of 25 kobo per share. Payment date is on the 21st of September 2017. Access bank closed at N9.90 in Friday’s trading session, up 68% year to date.
Nigerian Enamelware Plc
Nigerian Enamelware Company will be giving a bonus of 1 share for every 5 held. Closure of register is from 18th-22nd of September 2017. Nigerian Enamelware Plc closed at 27.87 after Friday’s trading session, down 4.98% year to date.
What are bonus shares?
Bonus shares are issued based on the number of shares shareholders own. Companies issue bonus shares in order to conserve cash, and in order to meet shareholder expectations.The company pays for the shares using cash from its reserves. Companies can also decide to issue bonus shares in order to increase the float or total number of shares available for purchase.
While the issue of bonus shares increases the total number of shares issued and owned, it does not change the value of the company. This is because when bonus shares are issued, there is a fall in the price of the shares. Shareholders could decide to hold their bonus shares, or sell them. Issuing bonus shares could however lead to a drop in the Earnings Per Share of the company, except there is a significant increase in profit. In the case of Nigerian Enamelware Plc, 1 share for every 5 held means, shareholders will get 200 bonus shares for every 1000 shares they have.
The share price of a company often increases once announcement of a bonus is made, as investors often decide to buy the shares, to benefit from the bonus. The price of a stock after it has issued a bonus is called the mark down price. Bonus shares are usually represented by a certificate, or issued electronically.