Friday 14th January 2011
Dear Reader,
NEW ARTICLE
ICBC rights issue - just practising?
We look at the hidden
cost of ICBC's mini-rights issue, which raised less than they paid out in last
year's dividend. Non-government shareholders could have avoided billions in tax
if the bank had just kept the profit instead - unless it plans to cut this
year's dividend as well. More likely, the rights issue was just a practise run
for something larger next time. (14-Jan-2011)
RECENT ARTICLES
Minimum wage will reduce some incomes
The road to
intervention is paved with unintended consequences. We look at the conflict
between the Minimum Wage and the MPF, resulting in some workers receiving less
take-home pay and others having very little work incentive beyond 178.5 paid
hours per month. We propose adjustments to the MPF threshold and contribution
basis for low-income workers to address this. (2-Jan-2011)
Truly pointless bonus issues and splits
Why do boards
propose bonus issues and stock splits? We look at the drawbacks and the false
and misleading reasons often advanced for such actions. If liquidity is really a
concern, then a reduction in board lot size is the simplest and best way to go.
Splits and bonuses are more a sign of desperation than of a sophisticated,
value-focused board (27-Dec-2010)
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