I will try and hope my explanation is clear enough.
The announcement date is when board of directors declares to shareholders and the market as a whole that the company will pay dividend.
The Ex-date or Ex-dividend date is when you purchase a dividend paying stock one day before the ex-date, then you are entitled for dividend payment. Conversely, it you sell a stock and still want to receive the dividend that has been declared, you need to sell on (or after) the ex-date. Ex-date is used to make sure dividend payment go to the right person. The current settlement period is T+3, which means that when you buy a stock, it takes 3 days from the transaction date (T) for the change to be entered into your CDS account.
For example, if you buy on Monday and Tuesday is the Ex-date, and then by Thursday the shares will be entered into your CDS accounts. If you purchase on Thursday with Friday as ex-date, only by Tuesday the shares appear in your CDS accounts.
With CDS and e-dividend payment arrangement, dividends payment will be credited to your bank account on payment date.
Since we can receive dividend by purchasing the shares before the ex-date, can we make more money? It’s not that easy, everyone knows when the dividend is going to be paid, and the market sees the dividend payout as a time when the company is giving out part of its earning and reducing its cash.
The price of the stock will drop approximately by the amount of the dividend on the ex-date. The actual drop in price can be different due to tax considerations or other reasons. The crux of the matter is there is no free lunch on the ex-dividend date.
To smalltimer - my guess is bukithot want to collect more... for sure he want to buy a lowest price possible. That way when the stock price move up again. He/she can sell with higher profit.
This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
haikeyila
1,068 posts
Posted by haikeyila > 2013-07-18 11:17 | Report Abuse
pretty good fundamentals, and will benefit from recovery in the us. but rather illiquid.