THE mention of a bonus sends the heartbeats of salaried workers racing. Maybe this word has the same effect with investors.
Banking giant DBS saw its share price jump – closing up 2.5 per cent up on Feb 7 – after it announced its full-year results and proposed a bonus issue. As at Feb 28, the counter has climbed 5.7 per cent since the announcement.
With DBS – Singapore’s largest company by market capitalisation – investors are probably right to be excited over the prospects of receiving free shares.
Generally, the issuance of bonus issues may do nothing to improve a company’s valuation.
All things being equal, a company’s earnings per share (EPS) declines when the number of shares…
