Crystal telecom shareholders will soon receive dividends of Rwf8.2 per share following a decision by the firm’s board.
The dividends to be disbursed do amount to Rwf2,215,454,024, which represents a dividend of Rwf8.2 per share of 270,177,320 shares issued during last year’s Initial Public Offering.
Crystal Telecom has already communcated to the chief executive officer of Rwanda Stock Exchange, informing him and shareholders that the dividend will be paid out following approval by the shareholders’ annual general meeting.
Crystal Telecom last year sold 270.71 million shares, which is 20 per cent of leading telecom, MTN Rwanda.
The firm’s initial public offering was oversubscribed by 123 per cent receiving over 2300 applications from Rwanda, the East African region and beyond.
This is the second special dividend declared by CTL in less than one year, since its Initial Public Offer (IPO) in June – August 2015, that is, just six months after the public offer.
The company paid a first special dividend per share of Rwf 3.75 in October 2015. At this rate, given the total dividend of Rwf 11.95, the dividend yield on this counter is therefore 11.38 %, based on the company’s IPO price of Rwf 105.
According to CDH Capital, a local Broker and Finance House, by paying total dividend of Rwf 11.95 for 2015, the company shows its promise to its shareholders by above normal return on investment. “With a dividend yield of 12.57 % – based on the current market price of Rwf 95 per share – this is more than any other locally listed companies can provide so far. This performance is among the best if a regional comparison is made”.
Given the company’s good performance, brokers expect the price to rise as local, regional and international investors swarm in to take hold of the expected dividend. “We have already seen many positive reactions from the market”, stated an analyst at CDH Capital Ltd. “Our order book has started to increase with this news”.
When being pressed on the expected price of CTL in the coming days, brokers are somewhat prudent and optimistic. “While we need to be prudent not to fuel and create any price hike, in our opinion, based on the dividend yield of 12.57 % as stated above, there are good reasons to be optimistic and to believe that CTL will head north”, an analyst at CDH Capital states.
Reacting on the development, the chief executive of Capital Markets Authority Robert Mathu, said the disbursement was a ‘good return’.
He said the move to regularly pay out dividend by the holding company was a good sign to investors.
Currently, Crystal Telecom shares are priced at Rwf99 per share.
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