Royal Ceramics Dividend Announcements - 31.01.2017

Quarterly Statements - 31.01.2017

DTS - 31.01.2017

ASI - Failed to pass.......6150

ASI did not pass the resistance of 6150. In fact it did pass 6150 in the morning hours hitting a high of 6159 but failed miserably. Trend is in a pathetic downside. Need to wait for a reversal, which might not be happening anytime soon.

Let's Talk Dividends - Almost everything about Dividends you need to know - Course 3

1. Introduction
2. Terms To Know And Other Basics
3. Investing In Dividend Stocks
4. Doing your homework
5. Conclusion

Introduction

A dividend is a distribution of a portion of a company's earnings to its shareholders. Dividends can be in the form of cash, and stocks. Most stable companies offer dividends to shareholders.

Investing in dividend-paying stocks can be an effective method of building long-term wealth. 

Terms To Know And Other Basics

Cash Dividend Cash payments made to stockholders, paid on a per share basis, quoted as a rupee amount. Cash dividends are typically paid out of the company's current earnings or accumulated profits.

Date of Announcement : This is the Day the Company makes the Announcement of the Dividend

Rate of Dividend : The Amount of Dividends paid per share.

Financial Year : Fiscal Year to which the Dividend is applicable.

Shareholder Approval : whether or not the Shareholders need to approve the dividend.

XD : The date on which the Dividend will be excluded for the Purchasers.

For example, stock ABC recently announced a cash dividend with an ex-dividend date of December 7. If you purchase 100 shares of ABC stock on December 7 (on or after the ex-dividend date) you will not receive the dividend; the person from whom you bought the shares will receive the dividend. If, however, you purchase the shares on December 6 (before the ex-dividend date) you will be entitled to receive the next dividend. The ex-dividend date for stocks is typically set one business day before the date of record. A stock's price may increase by the rupee amount of the dividend as the ex-date approaches. On the ex-dividend date, the exchange may reduce the price per share by the rupee amount of the dividend.

Payment : The Date on which the Dividend will be paid

Scrip dividends : Shares are offered in place of Cash. Ex. 1 for 50 shares of ABC company. Here you will get 1 share for every 50 shares you own. The cash equivalent per share is calculated at the closing price on the last day before the XD date. Let's say the closing price is 10, then you divide 10 by 50 = =/20 cents.                             

Investing In Dividend Stocks

Many people invest in dividend-paying stocks to take advantage of the steady payments and the opportunity to reinvest the dividends to purchase additional shares of stock. Since many dividend-paying stocks represent companies that are considered financially stable and mature, the stock prices of these companies may steadily increase over time while shareholders enjoy periodic dividend payments. In addition, these well-established companies often raise dividends over time. For example, a company may offer a Rs. 2.50 dividend one year, and the next year pay a Rs. 3.00 dividend. It's certainly not guaranteed; however, once a company has the reputation of delivering reliable dividends that increase over time, it is going to work hard not to disappoint its investors.

A company that pays consistent, rising dividends is likely to be a financially healthy firm that generates consistent cash flows (this cash, after all, is where the dividends come from). These companies are often stable, and their stock prices tend to be less volatile than the market in general. As such, they may be lower in risk than companies that do not pay dividends and that have more volatile price movements

Because many dividend-paying stocks are lower in  risk ( Specially the Large Long Standing Companies), the stocks are an appealing investment for both younger people looking for a way to generate income over the long haul, and for people approaching retirement - or who are in retirement - who desire a source of retirement income.

Contributing further to investor confidence is the relationship between share price and dividend yield. If share prices drop, the yield will rise correspondingly.

Doing Your Homework And Taxes

Similar to any other investments, it is important to perform due diligence prior to making any dividend-related decisions. There are several factors to consider when researching and selecting dividend stocks, including the dividend yield, dividend coverage ratio and the company's history of dividends.

Dividend YieldAs mentioned previously in this tutorial, the dividend yield shows how much a company pays in dividends each year relative to its share price. It is calculated by dividing the annual dividends per share by the price per share.  It is calculated as follows:






Dividend Yield = (Dividend Per Share/Share Price)*100


It would make sense that the higher the dividend yield, the better the investment, but this financial ratio can be deceptive. Remember that this ratio increases as share prices drop. A dividend yield that is unusually higher than other stocks in the same industry may indicate that the stock's price may drop, or that future dividends will be cut or eliminated. This can spell double-trouble for investors who will lose money both on the falling stock price and the loss of any future dividend income.

Dividend Coverage Ratio The ratio between a company's earnings and its net dividend to shareholders is known as dividend coverage. This ratio helps investors measure if a company's earnings are sufficient to cover its dividend obligations. Dividend coverage is calculated by dividing earnings per share by the dividend per share:




Dividend Coverage = Earnings Per Share/Dividends Per Share
For example, a company that has earnings per share of Rs. 7 and pays a dividend of 2.5 would have dividend coverage of 2.8 (7 ÷ 2.5 = 2.8).

In general, a coverage ratio of 2 or 3 shows adequate coverage and that the company can afford to pay a dividend. If the ratio falls below 2, it could indicate that a dividend cut is on the horizon. If the ratio falls below 1, the company is likely using last year's retained earnings to cover this year's dividend. A ratio that is high, such as greater than 5, may indicate that the company is "holding out" on investors and could have paid a larger dividend to shareholders.

Continuous RecordsCompanies that boast consistent dividends, particularly if dividends increase over time, are typically financially stable and well-managed. While a good track record does not guarantee future results, a company that has performed well in the past may be less risky than one with a spotty or inconsistent history.

Taxes - 

Generally Dividends has a withholding tax of 14%, but certain companies are partly or fully exempted from taxes. 

Conclusion - 

Many investors seek dividend-paying stocks as a means of generating income and growing wealth. As with any investment, it is important to do your homework and find investments that are suitable to your investing style, time horizon, financial situation and financial objectives

.

ASI - Must break 6150 today

Present resistance at 6150 is an important level to be broken and SUPPORT and MUST establish a strong base. If not the present negative sentiments will persist.

DTS - 30.01.2017

Comb - Dividend announcement. Another may come before the end of February.

Date of Announcement: - 27.Jan.2017 
Rate of Dividend: - Rs. 3.00 per share / Second Interim Dividend 
Financial Year: - 2016 
Shareholder Approval: - Not Required 
XD: - 07.Feb.2017 
Payment: - 17.Feb.2017

DFCC - Must respect the support at 117.00

This post is a tribute to my friend TP, who shared his idea on Dfcc a few days ago. This counter had got battered so much, which can not be justified when you look at their trailing EPS. But obviously something is wrong, that is what the market is indicating to us. I believe for it to turn north the prices should form a base above 120.00 which was a support area turned resistance that is being tested right now. At all cost the present swing low at 117.00 should be respected. Let's wait......

TJL - Trade did not work, failed to close above 42.00

TJL had been strongly supported at 42.00 except on three days. With a dividend announced and the quarterly statement that did not sound disastrous, could not hold the stock above 42.00 this time around. The Short Term Trade therefore failed as it came down below 40.90, and we now have to wait until a swing low is formed to decide on a trade. The Close at 41.00 is another psychological support that needs to be held.

ASI - closed above the high of the 25th

                                               

The close at 6137.70 on the ASI suggests a bullish development, but there is a long way to go. Something encouraging is that the close at 6137.70 was tad above the high of 25th January 2017.

DTS - 27.01.2017

So What are Stocks - Course No. 2

Hope you read the earlier post on the Stock Market - Course 1

Let’s now move on to the Course 2…….

So, What Are Stocks?

I do not want to complicate things and like to give it to you straight. I am not into the whole textbook thing - what with all the jargon and formulas. Let’s keep it simple. Today, you're here to learn about stocks. And learn about stocks you will...

So, what are stocks anyway?

A company is made up of thousands, hundreds of thousands and even millions of small pieces of ownership, called shares. Management, employees and outside investors can buy shares in companies they believe to be GOOD INVESTMENTS.

Like an investment pizza pie, each share represents a percentage ownership of the entire company. Shares are also commonly called equity.

When companies are publicly traded on a stock exchange (typically only the largest of companies do), shares become known as stocks. Through the stock market, investors can buy and sell their ownership stakes in companies to one another.

Did you know?...You just covered 13% of all what want to know about stocks, read on…..

You'll learn:

·         more about what stocks are

·         why companies sell their stocks to investors

·         how investors stand to gain by buying shares in companies

Case Study: Who Owns People’s Insurance?

To understand more about how stock ownership works, let’s take a look at People’s Insurance as an example. When People’s Insurance was a private company (before it entered the public stock exchange) it was totally owned by People’s Leasing and Finance Plc, owning 150 million shares totaling 100% of the shares issued.

But when they went Public, and gave 50 million shares to the Public, a lot of investors managed to own bits and pieces of the Company other than the Major Share Holder. The following lists show you how it was then and now:

Before going Public

After going Public

This means that the shares of the company were owned by one entity i.e. People’s Leasing and Finance Plc before. But when People’s Insurance went public in 2016, it allowed any and all investors to own small pieces of the company in the form of stocks.

The takeaway here is: owning a company’s stock is like being a partial owner of the company itself.

We have covered 25% of getting to know about a Stock so far.

The Case for Owning Stocks

Ok, so you get what stocks are. But why are all these people putting their money in stocks? Why would you want to own a piece of a company?

Well, the answer is pretty simple. There are loads of investments out there – many of them good. Bank deposits, bonds, gold, and real estate have all performed well throughout history, but nothing (and we mean nothing!) has performed as well throughout history as stocks.

Don't believe us? We'll show you...

93.00 invested in the Cheveron Lubricants on the 2^nd of January 2009 would be worth over 636 at the end of 2016 plus 279.50 received as dividends, and the 1 share bought is now 4 shares due to splits . As your stock holding from 1 share to 4 shares you have earned a massive return of 884% for 7 years or 126.3% per annum. Just take a careful look at the chart below:

So that's one reason why you should invest some money in stocks...but not the only reason.

Why else should you invest in stocks?

·         It's easy: INVESTING IN STOCKS is easy. Real estate has also proved to be a good investment over the long term, but there’s a reason it’s called sweat equity: it’s hard! We’ll show you just how easy it is to research and buy stocks.

·         It's cheap: With online investing, you can buy and sell stocks. Even the cost of professional advice is zero (think about it...even this lesson your reading right now is FREE!). here's no minimum

·         investment: Unlike investing in real estate or private companies, there is no real minimum investment requirement when investing in stocks. That means everyone can get in on the action.

·         You (can) get free money for retirement: The above chart shows you how the dividends can earn you free money when you retire. Especially if you plan to enjoy a comfortable  retirement.

·         You get tax advantages: The fee imposed in the transaction cost is so innovative, that only some stupid guy would change it.

Given all this, there is probably no better way to grow your assets over time than partly through the stock market.

38% covered thus far keep going……

How to Make Money Buying Stocks

Stocks are the best way to grow a small investment into a much bigger one over time.

There are 3 ways you can earn money when buying stocks:

1. Your stocks go up in price

·         If you buy a stock at 10 per share and it goes up to 20 per share, you’ve doubled your money (on paper, anyway -- you’ll need to actually sell the stock to lock in your profits). These profits are known as capital gains. Over the long term (like 10 - 25 years), the stock market tends to go up, especially due to the Countries potential for development and economic growth.

2. You get paid to own stocks

·         Many public companies pay out a quarterly or yearly dividend to the owners of their stock. They do this in order to share their profits with investors. Sort of like a "thanks for believing in us" gift. It's not uncommon to make 2%-5% or more like in the above chevron example per year on an investment in a stock, just by collecting dividend payments. You own the stock? Pass ‘Go’ and collect your dividend. It’s that easy.

·         Companies Split shares into 2 more times. So when you own 1 share and the company splits it into 2 times on 2 occasions your 1 share becomes 4 shares( 1 splits into 2 = 2, then again splits into 2 =4 like the above chevron case)

So, your total returns from owning stocks will be based on both capital gains (your stocks going up in price) and dividend payments (you getting paid to own stocks). And when the share gets split both CG and Div is paid or the total shares you own.

A Little About Risk and Stocks:

·         In the SHORT term (say, less than a few years), it’s entirely conceivable that your investment in a stock could be worth less than what you paid for it. Bummer, but that’s the way the market works: it rewards long-term investors. Stocks can go up and down a lot during the course of that time.

·         With the potential for growth comes risk (risk and return are two sides of the same coin).

·         Stocks are certainly risky, too. But for patient investors, this risk typically pays off.

50% covered do you want to go the next half? Read on won’t take you long…..

Buy Your First Stock

With more than 200 companies trading on the stock exchange, it’s hard to know where to begin.

Good thing famed investors have simplified this early decision making for us...

They say to buy what you know. By buying what you know, they recommend that investors begin buying stocks for their portfolios by starting with their interests.

This idea of 'buying what you know' has 2 main benefits:

·         People make money in the stock market by knowing more than the next guy. If you've got more information or knowledge on a subject, chances are you're going to make better investment decisions when it comes to these sorts of stocks over others. If they are in fact better decisions, the stocks' prices will eventually reflect that. And you'll make money. 

·         If you're following stocks of companies you're interested in, you'll have an easier time keeping up with the news you need to keep yourself informed. If you're really into Banks, reading about healthcare stocks won't be as interesting as seeing what Com Bank and Sampath  have been up to lately. As with most things in life: if you're having fun with it, chances are you'll do better.

2 STEPS TO PICKING YOUR FIRST STOCKS:

·         Start by looking at yourself: In order to buy what you know, you got to...well...know yourself. Start by taking a good hard look at the things you're passionate about. Are you spending more and more money on something in particular? What consumer trends are you following? Do you have any hobbies? Play sports? What industry do you work in?

·         Buy stocks that match your interests: Find suitable stocks that match your interests, spending habits, or business experience. Why wait any longer? Let's do that right now...

63% done, only the last few steps, go on……

Is one Stock enough

One stock just isn’t enough. No successful sports team has one player at each position—they have multiple people with star potential to step up if someone gets hurt.

The same goes for your portfolio. You need multiple stocks to prevent catastrophe from having its way with your investments. If one investment fails, hopefully another part of your portfolio will be rocking its way upwards making you money and softening the blow of that dud investment.

Diversification

Of course you are familiar with the saying “don’t put all your eggs in one basket”. Well the same goes for your portfolio. Holding a diversified portfolio will lower your overall risk.

Here’s an example:

Imagine your entire portfolio is made up of 100 shares of Commercial Bank. Presently the Banking Sector is going through some tough times. This will, of course, hurt the value of your investment. Because your portfolio is made up of 100% of Commercial Bank stock, you are going to lose a lot of money.

If instead your portfolio is made up of a smaller percentage of Commercial Bank, as well as small percentages of stock in Access Engineering, The Construction Company, and Alumex and so forth. When Commercial goes through the rough, only a small percentage of your overall investments take a hit, rather than the whole thing.

Now you are well on your way to a diversified portfolio of stocks.

The course about knowing what Stocks are is complete……..Let’s meet for the Course No 3 soon

 For more information you can call me on 0773219506(whatsApp and Viber too), or mail on saliya@capitaltrust.lk.

Quarterly Results - JKH, TJL and Watawala

Learn the Basics of the Stock Market - Course 1

Basics Of The Stock Market 

This course breaks down the basics of the financial industry, focusing on the stock market so that anyone and everyone can understand just how the stock market works.

The Financial Industry

So you want to learn about the stock market…but where do you start?

The financial industry is really complicated. There are investors, brokers, traders, lenders, borrowers, advisors, companies, banks, stocks, shares, funds, prices…the list goes on and on and on. It can really make your head spin!

But it’s important to have a “big picture” understanding of all these elements because together they bring this thing we call the “stock market” to life.

It’s true; the stock market is like a living, breathing organism. And it’s always changing and evolving. But at some point, we’ve got to slow things down a bit and take a look inside.

That’s what we’re here to do today.

This course will put a magnifying glass to the financial world. We’ll go through the history of the financial industry and work towards understanding its basic structure. We’ll then zoom in and take a deep look at the stock market and how it functions.

So buckle up, because we’re about to jump on in and demystify the world that all those big wigs don’t want you to understand.

If you have read thus far cheers up…….you have completed 14% of this section…..keep moving

Why Does The Financial Industry Exist?

From bartering, metals and gold to paper bills and credit, money has always been around, albeit in many different forms.

Money was created out of a need to trade goods and services between one another. People always have needs. They need food to eat, clothes to wear, and shiny sports cars to…look cool. OK, some of our “needs” are more like “wants”. But either way, people look for ways to satisfy their demands.

Way back when, people traded goods in order to get what they needed, by giving up what they had. Let's say, I trade you a goat for a gallon of milk. But not all products and services are tradable. For instance, you wouldn’t trade wheat for electricity. So, we turn to money.

Money is the middleman. Money takes care of the transaction between buyers and sellers.

But as our world has developed and grown more complex, so has the meaning and purpose of money. We're no longer dealing with shepherds bartering sheep. Today we have multinational corporations that handle millions and billions of Rupees. In order to handle this evolution, we needed a way to organize it.

Enter the financial industry.

In a nutshell, the financial industry is all about managing money: investing it, growing it, saving it and ultimately spending it.

The stock market is at the centre of all this, where people (investors) and businesses meet to make transactions and respectively manage their money.

Well you have done 29% so far, happy? Read on….

Why Does The Stock Market Exist?

The real birth of what we think about today as the stock market started way back in 1896 in Sri Lanka and 1602 in the World, with the Dutch East India Company. Historians claim it to be the first company to ever offer shares to investors in exchange for a portion of its profits.

The stock market exists so that companies can raise money without incurring any debt (such is the case of a loan). They issue shares of their company to the public in what is known as an Initial Public Offering (IPO). Investors buy and sell these shares (or stocks) to one another on the stock exchange, thus making stock prices move up and down. If there are more people buying a stock than people selling it, the price goes up with the demand. If more people are selling than there are people buying a stock, that’s a sign that the company is unfavorable to own and the stock price drops.

The stock market is mutually beneficial to businesses and investors because:

·         Companies raise money to (try to) make their businesses grow

·         Investors invest in businesses to (try to) make their money grow

 

Let’s make it simple with an example: Elephant House (CCS.N.0000)

Let’s say you really love Elephant House Drinks. You have a demand daily for 3 bottles of EGB. In order to buy your EGB bottles, you need money. You make a pretty nice income from your job, but you’d like to have some extra disposable income so that you can afford your EGB bottles.You decide to grow your money by investing it in the stock market.

Elephant House understands that you (and millions of other people all around the Country and the World) have a demand for EGB daily. In order to satisfy that increasing demand, Elephant House  needs to grow; and they need money to do that. The company needs to buy more raw materials, hire more employees, open new Factories and Outlets, etc. So, in order to raise this money, they issue stock to investors on the stock market.

This means that they cut up the company into millions of (figurative) pieces. They sell these little pieces of the company, known as stocks, to people like you and me. If you own a stock, you own a little piece of the company.

Since you love EGB so much, you believe that they’ll be able to successfully grow and satisfy more peoples’ demand for EGB. You think they’ll buy more Raw Materials, hire skilled employees, and open beautiful new stores. So you decide to buy Their stock. This means that you own a little piece of the company. If Elephant House grow and make more money, your money grows along with it.

Now let’s look at the places where millions of these transactions take place each and every day: Colombo Stock Exchange.

Do you know how much You’ve read so far? 43%......keep it up you have the interest to invest

Colombo Stock Exchange

Remember when you were a kid, You and your friends use to trade cards of various types like Cars, Fighter Planes, Heroes? Well the stock exchange is like that…but for adults (if you can call them that).

A stock exchange is where investors trade their shares of companies to one another. That’s why stock prices are constantly changing. If more people are selling (and therefore trying to get rid of) a stock than those buying it, the stock price will drop. If more people want to buy a stock than people selling it, the stock price will rise. Stock exchange bring all these investors together, so that trades happen in a central and regulated place.

There are hundreds of stock exchanges all over the world. In Sri Lanka we have the CSE.

A lot of today’s trading takes place online, rather than on the trading floor on CSE. But that doesn’t mean the stock exchange lose any importance. Even though it all takes place online, each and every trade placed has to go through CSE  in order to match buyers and sellers together.

Next we’ll go through the different type of investors that are trading on these stock exchanges…

Great you’ve finished 57% of this course…….yeah!!!!

Investors

There are two types of investors out there: Institutional and Retail.

Institutional investors are large firms like banks, investment companies, mutual funds or hedge funds that invest pools of money on behalf of their investors. They make up the majority of the volume (number of shares traded) on the stock market. Because some of these firms are so large, their trades have a significant impact on the share price of a company. Institutional investors are sometimes referred to as “smart money” (but usually only by other institutional investors).

A Retail investor is…well…you. It refers to someone who puts money in the market for themselves: an individual investor.

71% complete a little more…….You need to know the rest too

Brokers & Brokerage Firms

Buying a stock is a tad more complicated than buying something like...say...A House. To do that, you could just jump on Hit Ad and put up an ad, find a seller, and meet up to get the House yourself. You’d be killing riffs in no time.

Buying a stock is more like buying a house through a Broker or a Real Estate Agent. That is because they will give you more ideas, knowledge and information, as buying a New House needs to be carefully done. They have all the information and knowledge to guide you in the journey of investment and trading.

In Sri Lanka we have Brokerage Companies Licensed by the SEC, and are members of the CSE. Within these Companies you have Investment Advisors, whom you will have to connect with. They are trained and equipped to train and guide you in the journey of investing or trading.

The Brokerage Company presently gets a fee of .64%, out of a total cost of 1.12% as stipulated by the CSE. This fee is charged when you Buy and Sell Stocks.

86% over……..

Choose Your Broker. If you think I can be yours call me for more on 0773219506, am on whatsapp and viber as well. My email is: saliya@capitaltrust.lk

Hurray!!! You made it 100% complete.