Dividend, Share Price: Is there a connection?

[rozella]

Re: Dividend, Share Price. Is there a connection?

Sold CPA today @ 148.0
Bought 18th October @ 143.0 with a margin of 70%
Investment 42.90/unit
Estimated distribution announcement expected around 18th December.
exdist expected 21st December, last years dist was 4.83/unit, zero franked
Gross profit 5.0/unit = 11.65% return on investment. 6 days

 

[rozella]

Re: Dividend, Share Price. Is there a connection?

Bought MCG today @ 624.0 with a margin of 65%
Investment 218.4/unit
Distribution announcement expected around 19th December.
Exdistribution expected 21st December
Last years distribution was 19.5/unit, zero franked.

 

[rozella]

Re: Dividend, Share Price. Is there a connection?

Sold an older parcel of ANZ today @ 2897.0
Bought 4th May @ 2770.0 with a margin of 75%
Investment 692.50/share
Exdiv 15th May, dividend 56.0/share, fully franked 24.0/share.
Gross profit 207.0/share = 29.89% return on investment, incl fc. 164 days

I am hoping to re-enter at a lower price prior to exdiv.

ps made some nice $$$'s with CFDs today on CBA & ANZ

 

[rozella]

Re: Dividend, Share Price. Is there a connection?

Sold 2 parcels of NAB today @ 3850.0
Bought 6th October @ 3746.0 with a margin of 75%
Investment 936.5/share
Gross profit 104.0/share = 11.10% return on investment. 20 days

Bought 17th October @ 3743.0 with a 75% margin
Investment 935.75/share
Gross profit 107.0/share = 11.43% return on investment. 9 days

Expected to report 3rd November, exdiv expected 10th November,
Last years dividend was 83.0/share 80% franked 28.46/share.

I hope to re-enter at a lower price prior to exdiv.

 

[hypnotic]

Re: Dividend, Share Price. Is there a connection?

Sold an older parcel of ANZ today @ 2897.0
Bought 4th May @ 2770.0 with a margin of 75%
Investment 692.50/share
Exdiv 15th May, dividend 56.0/share, fully franked 24.0/share.
Gross profit 207.0/share = 29.89% return on investment, incl fc. 164 days

I am hoping to re-enter at a lower price prior to exdiv.

ps made some nice $$$'s with CFDs today on CBA & ANZ

You sure have.. the banks are doing very well, and looking strong in my opionion for the comming months with a predicting interest rate rise.

 

[rozella]

Re: Dividend, Share Price. Is there a connection?

G'day hypnotic,

I have been locking in some profits on the banks because they usually drop on a rate rise.....I don't like to see good profits slip away & if they keep rising, I can always buy back in & miss a little bit.

This is an interesting situation as ANZ, SGB, NAB & WBC all report prior to the RBA's announcement on the 8th November, then go exdiv after that date, so there could be some volatility, & I am hoping to re-enter on a low day. ANZ goes exdiv on the 9th November.

 

[rozella]

Re: Dividend, Share Price. Is there a connection?

Bought MCW on the close today @ 200.0 with a margin of 65%
Investment 70.0/share
Estimated distribution announcement expected around 18th December.
exdist expected 21st December, last years dist was 7.6/unit, zero franked

 

[hypnotic]

Re: Dividend, Share Price. Is there a connection?

G'day hypnotic,

I have been locking in some profits on the banks because they usually drop on a rate rise.....I don't like to see good profits slip away & if they keep rising, I can always buy back in & miss a little bit.

This is an interesting situation as ANZ, SGB, NAB & WBC all report prior to the RBA's announcement on the 8th November, then go exdiv after that date, so there could be some volatility, & I am hoping to re-enter on a low day. ANZ goes exdiv on the 9th November.

Yeah they have been great. (better if i had bought in : )

Can i ask why they drop on a rate rise? I am relatively new to this, is there a particular reason? Or they just historically how the market reacts?

I like to hear your view on the volatility, you'll expect them to drop dramatically after the 9th?

Keep up with the good work. Enjoy reading your posts.

Hypnotic

 

[Julia]

Re: Dividend, Share Price. Is there a connection?

Yeah they have been great. (better if i had bought in : )

Can i ask why they drop on a rate rise? I am relatively new to this, is there a particular reason? Or they just historically how the market reacts?

I like to hear your view on the volatility, you'll expect them to drop dramatically after the 9th?

Keep up with the good work. Enjoy reading your posts.

Hypnotic

Hypnotic,

Usually (but not always) a share will drop when it goes ex dividend by roughly the amount of the dividend. The reason is obvious. If you buy it cum dividend (before the ex-div date) you will be paid the dividend but if you buy it after the ex-div date then you will not receive that dividend amount.
So if a share's dividend is 10c per share it's fairly common for the stock to drop that much on going ex-dividend.

Hope that helps.

Julia

 

[hypnotic]

Re: Dividend, Share Price. Is there a connection?

Hypnotic,

Usually (but not always) a share will drop when it goes ex dividend by roughly the amount of the dividend. The reason is obvious. If you buy it cum dividend (before the ex-div date) you will be paid the dividend but if you buy it after the ex-div date then you will not receive that dividend amount.
So if a share's dividend is 10c per share it's fairly common for the stock to drop that much on going ex-dividend.

Hope that helps.

Julia

Hi Julia,

Thanks for your response, you might have misinterpreted my question, i was asking why roz was saying share prices of banks will usually drop after a RATE RISE. Or is it that the sharemarket usually drops after a rate rise?? But i would have thought banks would go up?

 

[rozella]

Re: Dividend, Share Price. Is there a connection?

Can i ask why they drop on a rate rise? I am relatively new to this, is there a particular reason? Or they just historically how the market reacts?

I like to hear your view on the volatility, you'll expect them to drop dramatically after the 9th?

Hypnotic

Generally the banks drop on a rate rise as it is expected that they will have less new customers borrowing. They will be paying a higher rate for their cash too, however, it is usually just a kneejerk reaction that may last a few days or so.....maybe a few weeks, then start rising again.

This is my opinion only, so expect the unexpected.

I sold most of my bank stocks on Thursday & Friday at high prices, including those held in CFDs, but I am hoping to re-enter on Monday at prices 40 or 50 cents lower after the DOW took a drop on Friday. I think all the banks will have good reports this week, so then the plan is to sell again prior to the RBA announcement........sounds okay in theory, but we will see what happens.....I may be way off course.

 

[rozella]

Re: Dividend, Share Price. Is there a connection?

Catching up on some posts.

Re-entered NAB on 30th October @ 3800.0 with a margin of 75%
Investment 950.0/share
Reported 3rd November, exdiv 10th November, dividend 84.0/share 90% franked 32.4/share

Re-entered CPA on 30th October @ 143.0 with a margin of 70%
Investment 42.9/unit
Estimated distribution announcement expected around 18th December.
exdist expected 21st December, last years dist was 4.83/unit, zero franked

Bought SGP on 30th October @ 747.0 with a margin of 70%
Investment 224.1/unit
Estimated distribution announcement expected around 18th December.
exdist expected 21st December, last years dist was 20.5/unit, 21.98% franked 1.93/unit

Re-entered ANZ on 3rd November @ 2961.0 with a margin of 75%
Investment 740.25/share
Reported 26th October, exdiv 9th November, dividend 69.0/share fully franked 29.57/share

 

[rozella]

Re: Dividend, Share Price. Is there a connection?

Sold SGP today @ 781.0
Bought 30th October @ 747.0 with a margin of 70%
Investment 224.1/unit
Estimated distribution announcement expected around 18th December.
exdist expected 21st December, last years dist was 20.5/unit, 21.98% franked 1.93/unit
Gross profit 34.0/unit = 15.17% return on investment. 7 days

Will re-enter if opportunity arises before exdistribution.

 

[rozella]

Re: Dividend, Share Price. Is there a connection?

I have been uncertain as to how the banks will behave tomorrow when the RBA raises the rate, so near the close today I unloaded a bit. Once I have an idea which way they will go tomorrow, I will possibly buy back in at the best price I can get. I might lose a little, but I hate losing what I already have if it goes the wrong way.

Sold SGB today @ 3357.0
Bought 17th October @ 3193.0 with a margin of 75%
Investment 798.25/share
Dividend announcement 1st November, exdiv 29th November.
Dividend 77.0/share fully franked 33.0/share
Gross profit 164.0/share = 20.54% return on investment. 21 days

Sold SGB today @ 3357.0
Bought 23rd October @ 3213.0 with a margin of 75%
Investment 803.25/share
Dividend announcement 1st November, exdiv 29th November.
Dividend 77.0/share fully franked 33.0/share
Gross profit 144.0/share = 17.93% return on investment. 15 days

Sold NAB today @ 4025.0
Bought 30th October @ 3800.0 with a margin of 75%
Investment 950.0/share
Reported 3rd November, exdiv 10th November, dividend 84.0/share 90% franked 32.4/share
Gross profit 225.0/share = 23.68% return on investment. 8 days

Also sold CBA, SGB today & NAB yesterday in CFD account....returns on investment are mind boggling with such high leverage (97%)

 

[rozella]

Re: Dividend, Share Price. Is there a connection?

It was a bit of a wasted exercise selling SGB & NAB yesterday as the rate announcement had little effect. I managed to re-enter NAB on the close today. Plenty of time for SGB.

Bought NAB today @ 4020.0 with a margin of 75%
Investment 1005.0/share
Exdiv 10th November, dividend 84.0/share 90% franked 32.4/share

Also re-entered NAB in cfd account.

 

[hypnotic]

Re: Dividend, Share Price. Is there a connection?

Yeah seems like the only bank that went down today was CBA.

Seemed like the market must have factored their buying already as the market probably had a relatively good idea that the rates were going to rise. *shrugs*.

ANZ looks very strong, when is that bull going to stop??

Good luck with the banks roz.. and thanks for the reply.

 

[scsl]

Re: Dividend, Share Price. Is there a connection?

Yeah seems like the only bank that went down today was CBA.

Seemed like the market must have factored their buying already as the market probably had a relatively good idea that the rates were going to rise. *shrugs*.

ANZ looks very strong, when is that bull going to stop??

Good luck with the banks roz.. and thanks for the reply.

IMO, I think ANZ is really overbought, but I have yet to go short because my last short was on NAB, and that didn't go very well. rozella, would you short any banks atm?

 

[rozella]

Re: Dividend, Share Price. Is there a connection?

I placed 2 orders for SGB yesterday @ 3325.0 as I would be out at open today.....both were filled at different times today....2 separate accounts.

Bought SGB today @ 3325.0 with a margin of 75%
Investment 831.25/share
Exdiv 29th November, dividend 77.0/share fully franked 33.0/share

Bought SGB today @ 3325.0 with a margin of 75%
Investment 831.25/share
Exdiv 29th November, dividend 77.0/share fully franked 33.0/share

 

[rozella]

Re: Dividend, Share Price. Is there a connection?

G'day scsl

IMO, I think ANZ is really overbought, but I have yet to go short because my last short was on NAB, and that didn't go very well. rozella, would you short any banks atm?

I have not done any shorting for a few years as it does not fit my dividend trading strategy, but I agree, the banks are very pricey atm.

I always allow a drop on exdiv day of dividend + franking credit, & in the case of ANZ, this would be 69.0 + 29.57 = 98.57/share. ANZ went exdiv today & is down 118.0 atm. I just bought 1000 @ 2890.0 to ride the price back hopefully. So I am still buying the banks. I also just bought 2 parcels of SGB & also CBA & SGB in CFDs today......but I have my finger on the trigger.

All the banks are down except WBC & I have another order in that too in the CFD account. MBL reports next Tuesday.....that will be an interesting one, but the dividend is usually very poor, but may be a trade between now & the report.

rozella

 

[rozella]

Re: Dividend, Share Price. Is there a connection?

Re-entered SGP today @ 770.0 with a margin of 70%
Investment 231.0/unit
Estimated distribution announcement expected around 18th December.
exdist expected 21st December, last years dist was 20.5/unit, 21.98% franked 1.93/unit