[ad_1]
Background: Regular profits will be the source of household expenses
Al-Emadi: Leveraging revenue and injecting new funds into the market
Akl: Increased liquidity and expectations of rising share prices
Financial and stock market experts confirm that the new controls on dividend distribution of companies participating in the stock market support the financial market and enhance the attractiveness of corporate or institutional investment. Experts expect the stock market to recover in the new period. They emphasize that leading companies will take the initiative to implement new regulations and withdraw from speculative stocks to increase trading volume and liquidity, which will be injected into the stock market again. Investors hold stocks for the purpose of speculation and quick profit.
Businessman Ahmed Al-Khalaf, for his part, confirmed that the new dividend distribution procedure enhances the strength and stability of the financial market and contributes to its position as one of the emerging markets that attracts capital and provides good returns on investments.
He added that the new controls have enhanced the attractiveness of the stock exchanges to individuals and small institutions seeking regular returns rather than waiting for a full year to get them. Many individual investors want to switch to investing in leading companies as they are more able to make quarterly and semi-annual distributions such as Industries, Bank, Navigation, Kahramaa, Arid, Fuel, Al Meera, etc., and therefore these companies become attractive and tempting to buy their shares and benefit from the new distribution system.
Substantive changes
Al-Khalaf confirmed that the new control measures include fundamental changes in the mechanism for distributing annual profits to shareholders of joint-stock companies listed on the Qatar Stock Exchange, and also include regulating the distribution of interim profits (quarterly, half-yearly) of companies that want to do so.
He added that Edaa will be responsible for the new distribution, distributing shareholder profits on behalf of the listed joint stock company.
The Company is obliged to transfer the profits approved for distribution to shareholders to the company “Edaa”, which in turn will transfer the profits to shareholders through a number of options provided for in Article (13) of the Control Rights, including transfer to each investor’s bank account, or the investor’s trading account … of the brokerage company with which he trades, or add it to the investor’s Qatari credit card (Hamyan) balance according to the method chosen by the investor to receive the profits due to him.
He confirmed that these facilities contribute to making the market more attractive to investors, especially individuals who rely on these returns, if the amounts are large, as a source of monthly spending instead of relying on bank deposits, which is a huge advantage achieved through the new controls.
Al-Khalaf expects that the stock market will recover in the new year after the implementation of new regulatory measures, and companies, especially leading companies, will have great demand to implement these measures.
Providing attractive investment opportunities
For his part, businessman Mr. Abdulaziz Al-Emadi affirmed that the new measures will help support the stock market and provide attractive investment opportunities in the stock market, which is one of the most promising markets in the region.
He added that these measures announced by the Chairman of the Qatar Financial Markets Authority provide stock market investors with regular returns (quarterly or annually) on the value of their investments, rather than waiting for returns at the end of each period. In addition to attracting new types of investors to the stock market, they also regularly inject part or all of the distributed profits back into the market, thereby increasing market activity, and enhancing investor confidence in the operating performance, financial condition and ability of listed companies to generate real medium-term income and cash flow.
He confirmed that these measures will undoubtedly contribute to the recovery of the market and the increase in trading, as the proceeds will be used to buy and sell stocks, leading to an increase in daily transactions and increased market liquidity.
Regarding the new control procedures, Al-Emadi said that dividends will be paid to those entitled to them within the end of the fifth business day after the date of receipt of the listed company’s profits, provided that “the listed company undertakes to transfer all the distributed cash dividends to the designated dividend distribution account and has notified the depositary and sent a statement with the names of the shareholders entitled to receive the cash dividends.” The distribution of their respective profits to the depositary company shall be made within no more than three business days from the date of the decision of the general meeting of shareholders or the board of directors to distribute interim dividends, provided that the profits are transferred to the investors’ accounts within no more than 10 days from the date of approval by the relevant body of the company, whether it is the general meeting of shareholders or the board of directors.
Profit distribution to shareholders through a depository company is intended to facilitate and simplify the distribution procedure, keep shareholder profits in a trusted party, unify the distribution procedure and destination, and speed up the distribution and delivery process. This is worthwhile by shortening the time for shareholders to receive profits and limiting it to a few days, in addition to reducing the costs and burdens of listed companies and encouraging investors to reinvest these distributions in full or in part into the market. In addition, it enables them to choose the most appropriate way to receive their due rights from cash distributions according to what they think is suitable for them.
Investor benefits
Financial expert Ahmed Akl confirms that the recent decision on new controls on dividend distribution is a positive one that is in the interests of investors and greatly encourages investments by all categories of investors.
Akl added that the decision will have a significant positive impact in the coming period as semi-annual and quarterly dividends are suitable for most investors seeking returns on their stock market investments.
He explained that getting returns in stages, whether quarterly or half-yearly, brings a lot of benefits, not the least of which is that the funds can be pumped back into the market, increasing trading and capital turnover, which can generate other returns. These funds increase the amount of money invested by each investor.
Aql added that one of the benefits is increased market liquidity, leading to more buying and selling activities, which in turn boosts prices and leads to a recovery in stock market trading.
He explained that the waiting period for investors to get their returns has been shortened, ranging from 3 to 6 months instead of a full year, so the process of holding on to stocks, especially blue-chip stocks, has become more attractive. It is well known that after the shareholder meeting, a certain percentage of shares are sold in order to be bought back again when the share price falls.
Akl added that in the case of quarterly and semi-annual distributions, the sales process was useless and did not realize the interests of investors, so it was decided to realize the advantages of retaining shares instead of selling them in order to benefit from the shares. Regular distribution of shares, especially quarterly distribution, that is, 4 times a year, provides support for investors in the stock market.
Akl confirmed that the new controls help to make investors participants in stock market investments, it also clarifies the future trends of stock companies and their profit expectations within a year, which helps investors to change and adjust their financial positions according to the new expectations and dividends.
Akl added that the decision regulates cash flow in the market as investors know the expected and future returns, especially those who rely on these profits to pay for daily expenses and expenses, which helps provide cash to finance the daily expenses of investors, thereby competing with banks to provide cash to investors instead of relying on deposits or funds deposited with banks. Another source will be regular profit distributions.
Akl predicts that leading stocks will proactively implement the new regulation, speculative stocks held by investors for speculation and quick profits will be withdrawn, leading stocks will show positive trends, and profits are expected to be distributed on a quarterly basis, which is most suitable for the majority of investors.
Comprehensive Learning
The new dividend distribution control measures were announced by Dr. Tammy bin Ahmed Al Binali, CEO of the Qatar Financial Markets Authority, which conducted a comprehensive study on the possibility of distributing interim dividends in the Qatari capital market and conducted a survey through a questionnaire to understand the opinions of all those who are concerned about the new dividend distribution control measures. It is clear that most investors and partners of the Authority prefer interim profit distribution, whether it is quarterly or half-yearly, which guarantees them a fast cycle of income, provides them with investment options other than the bank savings pool, and attracts more people to invest in listed companies, which will positively reflect the increase in financial market activities and lead to an increase in financial market liquidity.
When a listed company distributes interim dividends to shareholders during the fiscal year, it must consider whether a number of conditions have been met, including the provision in the company’s articles of association that allows the board of directors to distribute interim dividends during the fiscal year, obtain the approval of the Qatar Central Bank for the companies it regulates, and issue a decision of the company’s board of directors determining the proportion of distribution of interim dividends for the fiscal year (quarterly or half-yearly) and the due date of dividends as stipulated in the company’s articles of association. The board of directors shall not approve the distribution of interim dividends except after the issuance of quarterly financial statements or the company’s half-year report accompanied by a review report by the company’s external auditor.
The date of the board meeting to discuss the distribution of interim dividends must be announced at least one week before the meeting, and the company must achieve a net profit in the quarterly or half-year financial statements at the time of the resolution before distributing dividends to shareholders, which must be paid after deducting the prescribed percentage of statutory and optional reserves (if any).
The profit distributed at the end of each quarter must not be greater than the profit realized in the financial statements for that quarter after deducting the prescribed provisions. The company’s annual report submitted to the shareholders’ meeting must include a percentage of the interim profit. In addition to the percentage of profit proposed to be distributed at the end of the financial year, these distributions total the amount distributed to shareholders during the year.
Under these conditions, the company may not ask shareholders to return interim dividends distributed under these controls if the company incurs losses in the subsequent financial period of the year, and the reports of the external auditors reviewing the interim financial statements (quarterly/half-yearly) must include data including actual profits realized by the company, the value of net profits realized after deducting provisions, whether there is sufficient liquidity to pay the distribution proposed by the board of directors, and that the proposed distribution does not affect the repayment of debts and obligations of the company on scheduled dates.
[ad_2]
Source link
