KUALA LUMPUR: High dividend payouts by large-capitalised stocks like Tenaga Nasional Bhd (TNB) augur well for the economy as it spurs consumer spending and boost investor sentiment.
Billions will flow into the system as direct shareholders and account holders of institutional funds with holdings in the company’s shares stand to gain with more money in their pockets, said Sunway University business school professor of economics Yeah Kim Leng.
“The higher income from the dividends would help further lift disposable income.
“This may support consumption growth, which rose by around 7% in the third quarter of this year,” he told Bernama.
On TNB’s record dividend payout, Yeah said it would in turn help sustain consumer spending in 2018.
TNB announced a payout of RM3.5bil for financial year ended Aug 31, 2017.
Its board of directors decided to increase the current dividend payout range to 30%-60% from the previous 30%-50%.
For the record, as of August 2017, the Employees Provident Fund (EPF) has 11.7% stake in TNB, Permodalan Nasional Bhd (PNB) (11.08%), Retirement Fund Inc (KWAP) (5.49%) Tabung Haji (1.83%) and Lembaga Tabung Angkatan Tentera (0.15%). An analyst, who requested anonymity, concurred.
“Although the majority of the shareholders are institutions such as EPF, PNB and KWAP and unit trust companies, the people will eventually benefit as it puts more money in the hands of shareholders or unit holders. It is the trickle-down effect,” he said. — Bernama