28 listed firms pay ‘no dividends’

Twenty-eight companies failed to pay any dividend to their shareholders for the fiscal 2020-21 as the global coronavirus pandemic hit hard on their balance sheets.

A company is downgraded to ‘Z’ category if it does not declare any dividend or do not hold annual general meeting regularly or is not in continuous operation for more than six months, according to securities rules.

The Z-category scrips require investors to be more careful before betting the stocks of the companies.

Out of 28 companies, nine are from the textile sector.

Companies across the world too were forced to cut or suspend their dividend payouts to conserve cash in the wake of the Covid-19 crisis. Globally, dividends fell by over a fifth to $383.2 billion in the second quarter of 2020.

“The pandemic-hit companies did not pay any dividend to their shareholders. However, some companies intentionally declared no dividend,” said a top stock broker.

“Besides, some paid no dividends taking the future of the business into account. And again, some could not pay dividends due to the incompetence of their directors,” he added.

Speaking to the Business Post, Bangladesh Securities and Exchange Commission (BSEC) Commissioner Shaikh Shamsuddin Ahmed said, “The stock market regulator is keeping an eye on the companies which did not pay dividends despite making profits. They will be summoned soon. We are always ready to protect the interests of investors.”

“Some listed companies lack good governance,” said Abu Ahmed, a stock market analyst.

“Companies’ sponsors and directors often trade shares anonymously, violating securities rules. They tend to make false financial reports. For this reason, some companies pay no dividends. Because of this, general investors should be careful about putting funds on those companies.”

The stock exchanges as the primary regulators and BSEC should be vigilant on the poorly performing companies, he said.

According to the Dhaka Stock Exchange listing regulation, if a company fails to declare dividends for a period of five years from the last date of declaration of dividends or the date of listing with the exchange, it may be delisted.