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On the dividend policy of listed companies in China Problems and Countermeasures

Author: LiuYuanMing From: www.yourpaper.net Posted: 2009-07-09 17:30:23 Read:
Paper Keywords: Corporate Dividend Policy moderate
Abstract: This article describes the status of a dividend distribution of listed companies in China, pointed out that the existing dividend policy of listed companies in China, Chinese listed companies' dividend policy issues arising from both macro and micro, macro environment from the optimization of the listed companies and both of the micro-environment of China's listed companies, dividend policy put forward some suggestions.

Dividend policy is a listed company earnings allocated or retained for reinvestment decisions, plays a vital role in the company's operations, related to the long-term development of the company's future, and shareholders' return on investment requirements and the reasonable capital structure sex. Moderate dividend policy is not only attractive to investors, but also enables the company to obtain long-term, stable development conditions and opportunities. At present, China's listed companies dividend policy the main show the following characteristics: (1) does not allocate the high proportion; send share transfer was prevalent; dividend payout ratio is relatively low, inadequate cash dividends; does not have the ability to cash dividends companies keen dividends. Dividend policy of listed companies in China can be seen that there are still some problems to some extent affected the normal operation of the company's development and economic, should cause us sufficient knowledge.

Dividend policy of listed companies in China exist
1.
1.1 Dividend policy is the lack of continuity and stability.
Continuous, stable dividend policy, not only investors hope the company is also operating in good condition, and unstable dividend policy tends to reduce the confidence of investors, will ultimately affect the company's development. The lack of continuity and stability of China's current dividend policy of most listed companies, dividend policy formulation and implementation of a lack of vision and purpose is clear and randomness.
1.2 refinance to become a listed company dividend policy direct purpose.
Distribution of dividends of listed companies should not be assigned for the purpose of re Remuneration owned, should take full account of the company's operating condition and profitability, company earnings more general allocation, contrary to allocate or not allocate less. China's listed companies tend to dividend distribution as a means to achieve financing standards.
1.3 Dividend Policy in favor of management, and the management in its own interests instead of the interests of shareholders.
Under normal circumstances, the company's executive compensation growth rate should not exceed the company's profit growth should be slightly lower than or equal to the profit growth of the company, or management interests may appear to replace the abnormal phenomenon of the interests of shareholders. However, the situation of our country, its their own interests instead of the interests of shareholders, management is not uncommon.

2 Chinese listed companies dividend policy analysis of the causes problems
China's listed companies dividend distribution policy problem related to China's economic reform and China's market environment and the law is not perfect. Specifically, reflected in the following two aspects.
2.1 macro constraints.
2.1.1 The economic and environmental impact.
Listed company of the rapid growth of China's macroeconomic, real estate, household appliances, computers, finance and other industries along with the rapid development in the early days of the development of the stock market, these companies send allotment policy by the high proportion of a short period of time the share capital has been a rapid expansion; economy The development has entered a period of adjustment, and quickly adjusted to adapt to the transition, the distribution of many companies to take the expansion of the share capital of, or simply not allocated.
2.1.2 Company external constraints mechanism is not perfect.
Currently, our manager market has not yet been established, the M & A market is also underdeveloped market exit mechanism is imperfect, so that the external constraints faced by the company is very limited, especially listed companies exit mechanism late due to a variety of reasons of the protection of local government or parent Chi can not be implemented, resulting in loss or even seriously insolvent listed companies did not withdraw from the market, the operators and the largest shareholder of ST company not punished. The absence of external constraints mechanism, making listed companies is not enough emphasis on dividend policy, rarely consider the interests of the shareholders, especially minority shareholders.
2.2 microeconomic constraints.
2.2.1 company profitability, poor cash flow position.
The premise of the company to distribute cash dividends earnings within the year and has sufficient cash flow is not ideal, but the two financial indicators of listed companies in China. Since 1995, the net assets of listed companies profit margins declining, 11 19% in 1995 and 1998 dropped to 7.79%, maintained at between 7.5% to 8.5% from 1998, and the number of companies in which the losses are increasing. Some companies even if the earnings in the year, but there is no cash flow, if you want to cash dividends, will naturally cause some financial pressure. Therefore, there is no sustained profitability and good cash flow position of the root cause of the listed companies can not be continuous cash dividends.
2.2.2 shareholders irrational behavior.
The vast majority of our small and medium investors rights awareness is not strong, they pay more attention to capital gains, in particular is sent allotment the Tianquan income, in their eyes, the stock is "fried" As for the company's operating condition, dividend distribution policies are want the things they buy and sell stocks mainly in order to get the bid-ask spread income so keen to inquire about the news, to study the behavior of the dealer, less concerned about the company's performance and dividend. Such an investment philosophy also contributed to our dividend policy odd one hundred one of the reasons.
2.2.3 Equity Financing Preference.
Mature stock market, the proportion of debt financing is much greater than the proportion of equity financing, bond issue occupies an important position, the stock issuance backseat position. In China, corporate finance, equity financing ratio is higher than the proportion of debt financing, mainly because of the cost of equity financing is lower than the cost of debt financing. Need the company's debt repayment of principal and payment of interest, corporate realities and potential pressure on the payment, the Company issued shares of the company, the dividend bonus whether to issue a payment how much depends primarily on the company's profitability and management's willingness to not explicitly law, so the company does not exist to pay pressure. This is the number of listed companies equity financing preference reason.
3. Improve the dividend policy of listed companies in China's countermeasures
The 3.1 the optimization Dividend macro environment.
3.1.1 strengthen government regulation to reduce the intervention.
Short time of the development of China's securities market, the main body of law enforcement, regulatory objects and investors are different there relatively weak legal concept, so the government oversight agencies to strengthen supervision, not only to improve the operation of the market rules, and strict supervision of listed companies behavior for ignoring the rules, disrupt the market order, the company must promptly investigate and punish and punish. The government should adjust the guiding ideology of the securities market, the shift from direct administrative intervention in the market to strengthen supervision and rely on the economic and legal means to indirectly interfere.
3.1.2 establish and improve the securities market supervision and the legal system.
In addition to the currently running the "Securities Act" the Companies Act ", and other market regulatory laws should also develop and perfect the legal system of securities market regulation. First, we should seize the enactment of the Securities Market Supervision Act, to make up for the "Securities Act" on the market supervision and operation procedures, methods, and punishment blank, strengthening regulatory policies, procedures, regulatory and policy implementation program, penalties objects and procedures requirements.
Securities regulators regulations should develop clear institutional setup of the securities regulatory authorities, functions defined in staffing, scope of work, etc., and to further regulate the powers and responsibilities of the agencies from the regulations. Third, we should develop the securities market supervisory employees conduct norms "to regulate the behavior of practitioners.
3.1.3 strengthen the training and education of the main securities market.
In the the guide listed company dividend policy, and regulatory agencies can be held on a regular basis training courses, training content integrity education and financial management. Listed company decision makers integrity of education, to establish the concept of consciously safeguard the interests of small investors; through education of the listed company, the listed company to enhance the sense of mission and sense of responsibility to the investors' return. Distribution of dividends to distribute cash dividends especially not just the return on investment for small and medium investors, but also conducive to the listed companies to establish a good image.
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