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ESE ALL SHARE INDEX RECORDS 0% GROWTH

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MBABANE – The all share index of Eswatini Stock Exchange (ESE) records no growth in the past two weeks.

This has forced the ESE market capitalisation to remain stagnant at E4 293 186 644. Market capitalisation refers to the total value of all a company’s shares of stock. It is calculated by multiplying the price of a stock by its total number of outstanding shares. Nedbank Eswatini yielded no gains which forced their market cap to remain at E298 770 363. Swazi Empowerment Limited (SEL) have a market capitalisation of E666 000 000. The Royal Eswatini Sugar Corporation (RES) have the highest market capitalization of E1 464 467 104.
At this rate, RES is likely to have a larger share of dividends in the current financial period. Dividends now paid directly to bank accounts.

Dividends

The ESE has announced that dividends from local companies listed in their markets should be paid directly to client’s bank accounts. ESE said this was in line with the Central Bank of Eswatini’s (CBE) media statement issued July 20, 2021, announcing the elimination of cheques as a mode of payment effective from January 2022. ESE said the announcement by CBE does not affect the role of the broker in the transaction of dividends as they are expected to make sure that shareholders are taken care of. ESE analysis department said brokers need to make sure that client’s bank accounts are active. They said the role of the broker remain crucial despite the cancellation of the cheques as they are expected to make sure the dividends are received by the shareholders.

Payments

“Nothing much will change between the broker and shareholders as the change will only affect the process of payments which the broker will be accounted for”, they said. They also mentioned that the dividends are released by the companies and they will then transfer them to the shareholders who afore had to collect cheques. A majority of investors in Eswatini both as individuals and companies use the buy and hold strategy when buying stock on public listed companies under ESE.

Analysis

They seek out undervalued stocks and buy them with the intent to hold on to these positions for months, if not years with the intent to benefit from the company’s dividends. This was mentioned by ESE analysis department in an interview with this publication. They said they have seven enlisted companies under ESE, but most investors use the buy and hold strategy which is beneficiary to the dividends. ESE said investors come with the mantra of ‘buy low, sell high,’ and seek out undervalued stocks and buy them with the intent to hold on to these positions for months, if not years.

They said this is because investors believe the company’s management and performance supersede all the chaos and flux that is inherent in the market, and in time, the stock will reward them with a large return on their capital. “A buy and hold strategy is a long-term, passive strategy in which investors keep a relatively stable portfolio over time, regardless of short-term fluctuations”, said ESE. SEL declared an interim dividend of E38.3 million to ordinary shareholders registered as such in the company’s share register at the close of business on or before May 20, 2022.

Shareholders

RES Corporation has declared a final dividend of SZL65 million to ordinary shareholders registered as such in the company’s share register at the close of business on or before May 6, 2022. SBC Limited has declared an interim dividend of E30 million to ordinary shareholders registered as such in the company’s share register at the close of business on or before Friday, February 18, 2022. SEL also declared a final dividend of E23.7 million to ordinary shareholders registered as such in the company’s share register at the close of business on or before February 7, 2022.

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